Quick Summary Nvidia posted a 75.2% adjusted gross margin , among the highest in Big Tech AI hyperscalers plan US$650B capex in 2026 , much flowing to Nvidia Rivals like AMD, Alphabet and Amazon are gaining traction Long-term margin sustainability remains the key investor question Margins Steal the Show While investors already expected strong demand, NVIDIA Corp surprised with something even more impressive: Adjusted gross margin of 75.2% , the highest since late 2024 — and management expects similar levels next quarter. For a nearly US$5 trillion company , that margin signals extraordinary pricing power in AI hardware. AI Spending Wave Still Intact AI hyperscalers are forecasting ~US$650 billion in capex for 2026 , up roughly 60% from 2025. Nvidia remains the primary beneficiary as demand for data centre GPUs continues to surge. But maintaining 75% margins depends on two big factors: 1️⃣ Supply Constraints Rising memory costs remain a ris...
Quick Summary
US official says DeepSeek trained its latest AI model on Nvidia’s Blackwell chips
Blackwell exports to China are currently banned under US export controls
Chips allegedly clustered in Inner Mongolia data centre
Could intensify US-China tensions over AI semiconductor restrictions
What Happened
A senior Trump administration official said Chinese AI start-up DeepSeek trained its upcoming AI model using Nvidia’s most advanced chip, Blackwell, despite US restrictions.
Key points:
US policy states: “We are not shipping Blackwells to China.”
Blackwell exports to China are barred under Commerce Department controls
The chips are believed to be located in DeepSeek’s Inner Mongolia data centre
Nvidia declined to comment. DeepSeek and the US Commerce Department did not respond to requests.
Why This Is Significant
The Blackwell is Nvidia’s top-tier AI chip — central to training frontier AI models.
If confirmed, this development could:
Represent a violation of US export controls
Deepen divisions in Washington over AI chip policy
Strengthen calls from China hawks for tighter enforcement
Policy Divide in Washington
There are two competing views:
Pro-Export Argument
Voiced by figures like:
David Sacks
Jensen Huang
Argument:
Allowing some advanced chip sales discourages China from accelerating domestic alternatives like Huawei
Hawkish View
Critics argue:
Chips can be diverted for military AI applications
China may ignore guardrails or compliance conditions
Export controls must remain strict
H200 Chips Also in Question
President Donald Trump previously allowed sales of Nvidia’s second-most advanced chip, the H200, to Chinese firms — but shipments remain stalled due to regulatory guardrails.
This latest revelation could:
Influence future decisions on H200 approvals
Trigger tighter restrictions
Model Distillation Allegations
US officials also claim DeepSeek’s model may have used “distillation”:
A process where advanced US AI models (such as those from OpenAI, Anthropic, Google, or xAI) help train newer models
Effectively transferring performance advantages
DeepSeek previously shook markets with competitive AI models that rivalled US firms despite export restrictions.
Geopolitical Implications
China’s embassy in Washington criticised:
Expansive use of export controls
“Politicising” technology trade
Meanwhile, US officials say confirmation of Blackwell usage could:
Reignite debate over the scope of AI export bans
Escalate technology tensions between the two countries
Bottom Line
If DeepSeek indeed used Nvidia’s Blackwell chips, it would expose enforcement gaps in US export controls.
This case underscores the escalating battle over AI supremacy — where semiconductors are now at the heart of geopolitical competition.
The outcome may shape:
Future Nvidia-China chip sales
AI supply chain policy
US-China tech relations in 2026
Key Takeaways
Blackwell exports to China are officially banned
US believes DeepSeek used the chips anyway
Debate intensifies over AI export controls
Decision on H200 approvals may be affected
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