DeepSeek co-designs Huawei's AI chips as DHS orders its removal from federal systems

The Department of Homeland Security order banning DeepSeek from federal systems became public on Monday through a Federal Register filing, three months after it was signed. In the same week, The Information reported that DeepSeek has moved beyond being a Huawei customer and is now effectively a co-designer of the company's next-generation AI chips, with Huawei planning to hand DeepSeek most of the supply of its Ascend 960DT training chip when it launches next year.

The order, issued under the 2018 Federal Acquisition Supply Chain Security Act, directs civilian agencies — Treasury, State, Justice and the rest of the executive branch — to remove DeepSeek products and any third-party services built on the model, and bars future acquisition. The department cites "multiple threat vectors": China-based servers, personal data collected at sign-up, possible user fingerprinting, the risk that government use transfers sensitive data to the PRC. It lays out no underlying evidence, stops short of an Entity List designation, and leaves purely commercial use untouched. The Pentagon and the intelligence community are carved out, having already banned DeepSeek through the defense authorization bill for fiscal 2026. Federal agencies have presumably been deleting the software quietly since July.

The ban addresses the smaller half of the story. Huawei engineers have been stationed inside DeepSeek's offices for an extended period, folding the lab's requests into chip design decisions. In September, DeepSeek said it aimed to deploy more than 160,000 Huawei AI chips. On September 30 it open-sourced an Ascend port of TileLang — the open-source language both companies use in place of Nvidia's CUDA — along with Ascend versions of its DeepGEMM and DeepEP libraries, and publicly credited Huawei for a jointly optimized 128-chip Ascend 950 "supernode." DeepSeek's models now run largely on TileLang atop Huawei silicon, though TileLang itself is still early in its development.

Nvidia spent two decades building its moat by tuning hardware and CUDA in lockstep with its biggest customers. Export controls have assembled the same loop inside China, with one addition the sanctions themselves supply: the customers have nowhere else to shop. Nobody serious argues that Ascend matches Blackwell chip-for-chip. It does not need to while the demand is captive — and while the model DHS wants out of federal systems has open weights, and runs on any laptop, including a bureaucrat's. The order polices procurement lists, not code.

Huawei has pulled the Ascend 960DT launch forward to the first quarter of 2027, three quarters ahead of schedule.