US lawmakers are looking into how advanced Nvidia chips may have gotten into the hands of the Chinese AI company DeepSeek, which they also accused of spying on Americans on behalf of China.
House Representatives released a report on Wednesday that they said “reveals that DeepSeek covertly funnels American user data to the Chinese Communist Party, manipulates information to align with CCP propaganda, and was trained using material unlawfully obtained from US AI models.”
The lawmakers — Reps. John Moolenaar, a Republican from Michigan, and Raja Krishnamoorthi, a Democrat from Illinois — said it appeared DeepSeek, which released a powerful AI model that made headlines in January, had used 60,000 chips from Nvidia despite US sanctions limiting the ability of the company to sell some of its hardware to China.
Nvidia is already having a tough week. Its stock fell nearly 7% on Wednesday after the company announced that it had been informed that the Trump administration would require a new license for all accelerated chips shipping to China. The company said it expected a $5.5 billion decrease in earnings due to the Trump administration’s tariffs.
DeepSeek and a representative for Moolenaar did not respond to requests for comment from Business Insider about the report.
“DeepSeek isn’t just another AI app — it’s a weapon in the Chinese Communist Party’s arsenal, designed to spy on Americans, steal our technology, and subvert US law,” Moolenaar said in a statement, which called DeepSeek a “serious national security threat” to the US.
The lawmakers said Nvidia CEO Jensen Huang directed the design of chips to get around US export controls.
They also sent a letter to Huang requesting lists of customers located in China and Southeast Asia and any communications between Nvidia and DeepSeek.
Nvidia said in a statement to Business Insider that “the US government instructs American business on what they can sell and where — we follow the government’s directions to the letter.”
The company also said it sells its products to companies worldwide, adding that its reported Singapore revenue indicates the billing addresses of its clients, many of which the company said are subsidiaries of US companies.
“The associated products are shipped to other locations, including the United States and Taiwan, not to China,” the statement said.
The lawmakers’ report also found it was likely DeepSeek had deployed methods to copy leading AI models from US companies, violating those companies’ terms of service.
OpenAI told lawmakers “DeepSeek employees circumvented guardrails in OpenAI’s models” to accelerate the development of its own models at a lower cost, according to the report.
OpenAI said in January it was investigating if DeepSeek used the outputs of its AI models to “inappropriately” train its own models.
The report also found that 85% of responses from DeepSeek models purposefully suppress content related to democracy, Taiwan, Hong Kong, and human rights, the statement said.
The recommendations in the report include increasing the effectiveness of US export control policy and further restricting China’s ability to develop and deploy advanced AI models by expanding export controls on chips.
They also encourage Congress to consider requiring that chips companies track the eventual user of their products, not just the purchaser.
