The United States is ramping up efforts to investigate whether NVIDIA’s AI chips have fallen into the hands of DeepSeek via intermediaries in Asia, which could be a part of a larger effort to identify potential trade loopholes.
DeepSeek’s AI Breakthrough Has Sparked a Stricter US Crackdown on Exports, Prompting a Probe Into Trade Loopholes
After the recent controversy involving DeepSeek, US authorities appear increasingly determined to prevent their cutting-edge technology from reaching adversarial countries, such as China. Despite implementing a series of stringent export controls and restrictions, high-end NVIDIA AI chips, particularly the H100 models, are reportedly still accessible in China and other countries. Bloomberg has highlighted this issue, noting that US officials are currently scrutinizing whether these chips have been funneled to Chinese firms through locations like Singapore. If these suspicions are confirmed, significant repercussions could follow.
So, why the focus on Singapore? According to insights shared by @KobeissiLetter, NVIDIA’s sales to Singapore have skyrocketed by a staggering 740% since DeepSeek’s inception. This surge has fueled speculation about a potential loophole since Singapore isn’t a major player in the AI race. In an intriguing twist, NVIDIA has acknowledged that billing addresses might differ from the actual end-user locations, suggesting awareness of this possible workaround to skirt US restrictions.
On Twitter, @KobeissiLetter posed a critical question about the situation: "Did DeepSeek illegally buy Nvidia’s chips?" This post points out the sales spike to Singapore and raises concerns about possible third-party involvement in acquiring NVIDIA GPUs for DeepSeek—a development that could have significant implications.
To make matters more concerning, China has reportedly been importing chips from Singapore in volumes that exceed those shipped to the US. Considering Singapore only hosts about 99 data centers, this trend is indeed alarming. For context, DeepSeek is believed to possess computational assets worth over $1.6 billion, including some 10,000 of NVIDIA’s "China-specific" H800 AI GPUs and an additional 10,000 H100 AI chips. These figures indicate that China is not lacking access to the latest AI GPU technology, casting doubt on the effectiveness of current US restrictions.
Adding to the complexity, Singapore isn’t the only nation under suspicion. Other countries, like the Philippines, are also rumored to be conduits for supplying chips to China. As the US gears up to initiate a formal investigation, the stakes for NVIDIA are high, with potentially 20% of their AI revenue hanging in the balance. Should the US move to close this trade loophole, it could lead to far-reaching consequences—not just for NVIDIA, known colloquially as Team Green, but for the entire AI market.
