Chinese AI firm DeepSeek is reportedly developing its own AI chips, aiming to reduce its dependence on external suppliers like NVIDIA and Huawei. Sources suggest the company is focusing on chips for AI model inference, the process of running already trained models.

DeepSeek has allegedly begun hiring engineers and consulting with manufacturing partners. This move could intensify competition within China's AI chip sector. The company previously gained attention for its cost-effective open-source AI models, and a similar approach to chip design could significantly impact the market.

While any chips developed are likely to remain within China due to import/export restrictions, DeepSeek's entry into silicon design signals a growing trend of AI companies seeking greater control over their hardware. Success in creating cost and power-efficient chips could pose a challenge to established players like NVIDIA.