The latest investigation in the US is examining whether DeepSeek managed to procure NVIDIA’s AI chips via intermediary channels in Asia, aiming to pinpoint potential trade loopholes.
DeepSeek’s recent accomplishments in the artificial intelligence sector have prompted US authorities to tighten export restrictions significantly and potentially explore existing loopholes in trade. Following what’s being dubbed the “DeepSeek incident,” officials are more determined than ever to keep US-based technologies like NVIDIA’s advanced AI chips out of the hands of adversarial nations, notably China. Despite stringent export controls, some countries, including China, still manage to acquire top-tier AI hardware, such as NVIDIA’s H100 chips. Bloomberg suggests that US authorities are now investigating whether these components are being funneled to Chinese tech firms via countries like Singapore, which could lead to severe repercussions if proven.
Why has Singapore captured the spotlight? According to data shared by @KobeissiLetter, after DeepSeek emerged on the scene, Singapore’s imports of NVIDIA products supposedly skyrocketed by an astonishing 740%. Considering Singapore’s relatively modest standing in the AI field, such an increase raises eyebrows about exploiting a trade loophole. Further intrigue surrounds NVIDIA’s admission that the billing address might not always reflect the chip’s final destination, subtly indicating their awareness of possible loopholes circumventing US-imposed restrictions.
In a recent tweet, The Kobeissi Letter speculated about the legality of DeepSeek’s procurement of NVIDIA chips, highlighting the significant rise in exports to Singapore since DeepSeek’s inception and noting the potential ramifications of the ongoing investigation.
Furthermore, it’s reported that China has sourced more chips from Singapore than the US has, despite the nation housing merely 99 data centers. For those not in the loop, DeepSeek reportedly boasts computational assets valued over $1.6 billion, possessing approximately 10,000 H800 AI GPUs tailored for China, alongside another 10,000 top-tier H100 AI chips. This scenario suggests that despite current restrictions, China isn’t exactly facing a shortage of state-of-the-art AI GPUs, thereby rendering previous US efforts rather futile at this point.
Singapore is not alone under scrutiny; speculation surrounds other nations such as the Philippines potentially supplying chips to China. As the US gears up for a formal investigation, it places NVIDIA’s AI revenue—estimated at 20%—in a precarious position. Should the US opt to close this trade loophole, the consequences might ripple beyond NVIDIA, significantly impacting the wider AI market landscape.
