Nvidia on Wednesday refuted a report that the Chinese artificial intelligence startup DeepSeek has been using smuggled Blackwell chips to develop its upcoming model.

The U.S. has banned the export of Nvidia’s Blackwell chips, which are considered the company’s most advanced offerings, to China in an effort to stay ahead in the AI race.

DeepSeek is reportedly using chips that were snuck into the country without authorization, according to The Information.

“We haven’t seen any substantiation or received tips of ‘phantom datacenters’ constructed to deceive us and our OEM partners, then deconstructed, smuggled, and reconstructed somewhere else,” a Nvidia spokesperson said in a statement. “While such smuggling seems farfetched, we pursue any tip we receive.”

Nvidia has been one of the biggest winners of the AI boom so far because it develops the graphics processing units (GPUs) that are key for training models and running large workloads.

Since the hardware is so crucial for advancing AI technology, Nvidia’s relationship with China has become a political flashpoint among U.S. lawmakers.

President Donald Trump on Monday said Nvidia can ship its H200 chips to “approved customers” in China and elsewhere on the condition that the U.S. will get 25% of those sales.

The announcement was met with pushback from some Republicans.

DeepSeek spooked the U.S. tech sector in January when it released a reasoning model, called R1, that rocketed to the top of app stores and industry leaderboards. R1 was also created at a fraction of the cost of other models in the U.S., according to some analyst estimates.

In August, DeepSeek hinted that China will soon have its own “next generation” chips to support its AI models.

WATCH: Nvidia selling H200 AI chips to China is net positive, says Patrick Moorhead

– CNBC’s Kristina Partsinevelos contributed to this report.