In the latest efforts to stop China from getting ahead in the AI race, the Trump administration is considering penalties that would block China’s DeepSeek from buying U.S. technology, reports The New York Times. It has also been reported that the administration is currently debating Americans’ access to its services. DeepSeek, a Chinese start-up that shook up Wall Street a few months ago with its cheaper and more efficient AI models, has had the US taking firm steps to tighten controls and scrutinize tech investments.
A key focus of US export controls has been Nvidia, whose chips were used to build DeepSeek’s AI models. Even though the US had stringent export controls, the AI start-up managed to get hold of thousands of its GPUs, raising concerns about the effectiveness of the said controls. As a result, US officials now aim to prevent the most advanced chips from being sold to China to deter it from having a lead in the AI race.
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The U.S. House Select Committee on China said that “it has sent a formal letter to Nvidia demanding answers about sales to China and Southeast Asia to examine whether and how its chips ended up powering DeepSeek’s AI models—despite U.S. export restrictions”.
With the government tightening its export rules to China, the AI chipmaker has revealed how it would face a $5.5bn (£4.2bn) hit in costs. The company will now require licences to export its H20 AI chip to China, one of its most popular chips.
“The [government] indicated that the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China.”
The company also said that federal officials have advised them that the licence requirement “will be in effect for the indefinite future”.
According to Marc Einstein from the Counterpoint Research consultancy, the $5.5bn hit is in line with estimates.
“As we have seen in the last few days and weeks, this may largely be a negotiating tactic. I wouldn’t be surprised to see some exemptions or changes made to tariff policy in the near future.”
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10. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 63
Palantir Technologies Inc. (NASDAQ:PLTR) is a leading provider of artificial intelligence systems. On April 17, the company announced that Anthropic will be leveraging Palantir’s FedStart offering to make Anthropic’s Claude for Enterprise application available to the government sector at FedRAMP High and DoD Impact Level 5 (IL5) security standards. Claude has been designed for organizations requiring secure AI solutions, having the ability to support cross-functional teams in deep work. Palantir’s FedStart is a SaaS offering that allows companies to run their products within Palantir’s Federal Risk and Authorization Management Program (FedRAMP) and Impact Level (IL) accredited environment. It provides a seamless pathway for companies to achieve compliance and offer their products and services to the government. By using FedStart, Anthropic will be able to offer Claude to millions of federal government employees. Claude’s application will be hosted on Google Cloud.
“We built FedStart to accelerate the government’s ability to leverage the best, most innovative technologies as they emerge. By enabling the federal workforce to take advantage of Claude while ensuring strict adherence to the compliance and security requirements for processing U.S. government (USG) data, we are excited to help increase productivity and efficacy across government. Anthropic builds some of the world’s leading AI applications, and we’re thrilled that our FedStart program can support Anthropic’s accreditation journey.”
-Akash Jain, President of Palantir U.S. Government.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 79
QUALCOMM Incorporated (NASDAQ:QCOM) develops wireless technologies, supplies chips for mobile, automotive, and IoT, licenses patents, and invests in emerging tech. On April 17, Citi opened a positive catalyst watch on Qualcomm, stating that it expects a “beat and raise” during earnings and that the low sentiment provides a “reasonable valuation” on Qualcomm shares. It also quotes better-than-expected handset demand, particularly from China.
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