(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.

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.

(Reporting by Deborah Sophia in Bengaluru; Editing by Arun Koyyur)