Chinese startup Deepseek is building its own AI chip, Reuters reports. Three people familiar with the matter said the chip is designed for inference, the phase where a trained model generates responses for users, not for training new models. The move could reduce Deepseek's reliance on Nvidia and Huawei chips.

The project is still in its early stages. Deepseek is talking to chip design, manufacturing, and memory companies, and has been quietly hiring chip engineers for months without posting public job listings. The path won't be easy. US export controls cut Chinese companies off from access to the most advanced chips and memory. OpenAI and Anthropic are also working on their own chips.

Deepseek is also raising outside capital for the first time. According to Reuters, the company is looking to bring in $7 billion at a valuation of $52 to $59 billion.