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Business Insider
27-06-2025
- Business
- Business Insider
DeepSeek Hits a Wall as U.S. Chip Ban Chokes Nvidia (NVDA) Supply
Chinese AI firm DeepSeek could be facing major setbacks in developing and releasing its next large language model, known as R2, due to tightening U.S. export controls on Nvidia's (NVDA) most advanced chips. Indeed, according to The Information, the company's current models are heavily optimized for Nvidia's hardware, especially the H20 chip, which was previously the most powerful AI chip legally available to China. However, a new U.S. ban on the H20 has created a supply crunch that is leaving DeepSeek and its partners scrambling for alternatives. As a result, this shortage is expected to slow the adoption of R2, particularly within China, where demand for AI models is growing rapidly. Confident Investing Starts Here: It is worth noting that DeepSeek has not yet set a launch date for R2, as CEO Liang Wenfeng is reportedly unsatisfied with the model's current performance, and engineers are still refining it before release. Internally, the company has been working closely with major Chinese cloud providers by sharing technical specifications to help them prepare for R2 deployment. But the ability of these cloud platforms to meet demand is uncertain, as most customers using DeepSeek's previous model, R1, rely on the now-restricted H20 chips. While companies like Huawei offer domestic alternatives to Nvidia chips, DeepSeek's models are so closely tied to Nvidia's hardware and software ecosystem that switching would significantly reduce performance and efficiency. In fact, R1's success earlier this year led to a surge in orders for H20 chips from tech giants like ByteDance, Alibaba (BABA), and Tencent (TCEHY), who spent $16 billion on 1.2 million chips in early 2025. With no further H20s available, Chinese firms have resorted to using gaming GPUs like the RTX 4090, which are also restricted but more easily accessible on the black market. For now, R2's success may depend on how long China's current H20 supply can hold out. What Is a Good Price for NVDA? Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 35 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $175.28 per share implies 12.2% upside potential.
The Hindu
27-06-2025
- Business
- The Hindu
DeepSeek R2 launch stalled as CEO balks at progress: Report
Chinese AI startup DeepSeek has not yet determined the timing of the release of its R2 model as CEO Liang Wenfeng is not satisfied with its performance, The Information reported on Thursday, citing two people with knowledge of the situation. R2, a successor to DeepSeek's wildly popular R1 reasoning model, was planned for release in May with goals to produce better coding and reason in languages beyond English, Reuters reported earlier this year. Over the past several months, DeepSeek's engineers have been working to refine R2 until Liang gives the green light for release, according to The Information. However, a fast adoption of R2 could be difficult due to a shortage of Nvidia server chips in China as a result of U.S. export regulations, the report said, citing employees of top Chinese cloud firms that offer DeepSeek's models to enterprise customers. A potential surge in demand for R2 would overwhelm Chinese cloud providers, who need advanced Nvidia chips to run AI models, the report said. DeepSeek did not immediately respond to a Reuters request for comment. DeepSeek has been in touch with some Chinese cloud companies, providing them with technical specifications to guide their plans for hosting and distributing the model from their servers, the report said. Among its cloud customers currently using R1, the majority are running the model with Nvidia's H20 chips, The Information said. Fresh export curbs imposed by the Trump administration in April have prevented Nvidia from selling in the Chinese market its H20 chips - the only AI processors it could legally export to the country at the time.
Yahoo
26-06-2025
- Business
- Yahoo
DeepSeek's R2 model reportedly delayed over Nvidia chip shortages
-- DeepSeek's upcoming large language model R2 may face adoption challenges in China due to shortages of Nvidia (NASDAQ:NVDA) server chips, according to a report by The Information on Wednesday. The chip shortage has worsened following the recent US ban on Nvidia's H20 chips, which were specifically designed for the Chinese market. Most cloud customers currently using DeepSeek's popular R1 model are running it on these H20 chips. While engineers have been working intensively on the new model for several months, CEO Liang Wenfeng is not yet satisfied with its performance, the report added. DeepSeek has not yet determined when R2 will be released. The company's engineering team continues to refine R2 and will only release it after receiving approval from Liang. If R2 outperforms existing open-source models upon release, demand is expected to overwhelm Chinese cloud providers already struggling with Nvidia chip shortages. Related articles DeepSeek's R2 model reportedly delayed over Nvidia chip shortages Meta reportedly close to acquiring PlayAI Core Scientific shares rally as CoreWeave rekindles acquisition talks Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Upturn
26-06-2025
- Business
- Business Upturn
DeepSeek R2 launch delayed as CEO remains unsatisfied with progress, says report
By Aditya Bhagchandani Published on June 26, 2025, 20:23 IST Chinese artificial intelligence startup DeepSeek has postponed the launch of its much-anticipated R2 model, with CEO Liang Wenfeng reportedly unhappy with its current performance, according to a Reuters report citing The Information. The R2 model, intended as an advanced successor to DeepSeek's widely used R1 reasoning model, was initially scheduled for release in May. The new model aimed to deliver stronger coding abilities and enhanced reasoning across multiple languages beyond English. However, according to sources cited by The Information, DeepSeek engineers have been refining the model for months, awaiting final approval from Liang before any release. Adding to the challenges, the rollout of R2 could face major hurdles due to a shortage of Nvidia server chips in China, driven by recent U.S. export restrictions. This supply crunch has raised concerns among top Chinese cloud providers, many of whom currently use Nvidia's H20 chips to run DeepSeek's R1 model. DeepSeek has been in discussions with Chinese cloud firms, sharing technical specifications for potential R2 deployment once the green light is given. However, U.S. curbs imposed in April have barred Nvidia from selling even the H20 chips—the only AI processors it was legally allowed to export to China until recently. DeepSeek did not immediately respond to Reuters' request for comment on the delay. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Reuters
26-06-2025
- Business
- Reuters
DeepSeek R2 launch stalled as CEO balks at progress, The Information reports
June 26 (Reuters) - Chinese AI startup DeepSeek has not yet determined the timing of the release of its R2 model as CEO Liang Wenfeng is not satisfied with its performance, The Information reported on Thursday, citing two people with knowledge of the situation. R2, a successor to DeepSeek's wildly popular R1 reasoning model, was planned for release in May with goals to produce better coding and reason in languages beyond English, Reuters reported earlier this year. Over the past several months, DeepSeek's engineers have been working to refine R2 until Liang gives the green light for release, according to The Information, opens new tab. However, a fast adoption of R2 could be difficult due to a shortage of Nvidia server chips in China as a result of U.S. export regulations, the report said, citing employees of top Chinese cloud firms that offer DeepSeek's models to enterprise customers. A potential surge in demand for R2 would overwhelm Chinese cloud providers, who need advanced Nvidia chips to run AI models, the report said. DeepSeek did not immediately respond to a Reuters request for comment. DeepSeek has been in touch with some Chinese cloud companies, providing them with technical specifications to guide their plans for hosting and distributing the model from their servers, the report said. Among its cloud customers currently using R1, the majority are running the model with Nvidia's H20 chips, The Information said. Fresh export curbs imposed by the Trump administration in April have prevented Nvidia from selling in the Chinese market its H20 chips - the only AI processors it could legally export to the country at the time.
