The sanctions only “prevent” them from directly buying NVidia’s latest and greatest in the sense that NVidia can’t sell directly to them. Essentially, there are companies now who are in a country without the sanctions, they buy from NVidia (or a partner), and then ship them off to China. For the orgs in China doing this, there’s zero legal risk besides having foreign customs service intercept the shipment and losing the goods. For NVidia there is zero incentive to care, as long as they look like they do, because sales are sales. You can bet Jensen ain’t losing sleep over it.

GamersNexus had a really good investigative piece (~3hrs long) on this where they went to China and met with grey market sellers. That piece absolutely pissed off NVidia and resulted in a fight with Bloomberg too.

Deepseek may be also be running inference on oodles of Chinese hardware but it wouldn’t surprise me for a second if they just acquired Blackwell chips through the grey market. The original Deepseek models were all trained using NVidia chips if I remember right.