Congressional scrutiny is focused on Nvidia's technical support for Chinese AI firm DeepSeek. Lawmakers are investigating whether the chipmaker's collaboration aided DeepSeek in developing AI models later used by the Chinese military. Representative John Moolenaar's letter details Nvidia's assistance in optimizing algorithms and hardware design.

Nvidia's support helped DeepSeek achieve remarkable efficiency gains, raising concerns about circumventing U.S. export restrictions. DeepSeek-V3 reportedly required significantly fewer GPU hours for training compared to U.S. developers. The investigation covers Nvidia's activities in 2024, when DeepSeek was viewed as a standard commercial entity.

Nvidia defended its actions, stating the Chinese military doesn't rely on American hardware. However, the controversy comes as the U.S. government approved sales of more advanced H200 chips to China, facing criticism from those who fear it will bolster Beijing's AI capabilities. Nvidia stock remained stable after hours.

This situation underscores the ongoing geopolitical tensions surrounding AI and chip technology. The U.S. government is walking a tightrope, trying to support the domestic chip industry while preventing China from gaining an unfair advantage. Further investigations and potential legislation could follow, impacting Nvidia's business in China.