The United States has recently started looking into whether DeepSeek managed to obtain NVIDIA’s AI chips through intermediaries in Asia, aiming to uncover any trade loopholes that might exist.
### DeepSeek’s AI Breakthrough Prompts Stricter US Export Controls and Investigations
In the aftermath of the DeepSeek controversy, the U.S. is taking more stringent steps to ensure its technology doesn’t end up in the hands of countries like China, which are considered adversarial. Despite stringent export controls, countries such as China still seem to have access to advanced AI chips from NVIDIA, such as the H100s. Bloomberg has reported that U.S. officials are currently investigating whether these chips landed in Chinese firms via other nations like Singapore. If it’s confirmed that such loopholes exist, it could lead to significant repercussions.
But why focus on Singapore? Data from @KobeissiLetter suggests that NVIDIA’s sales to Singapore have skyrocketed by 740% since DeepSeek came into existence. Given that Singapore plays a minimal role in the AI race, this suggests a potential gap in the system. Interestingly, NVIDIA has acknowledged the possibility that the billing address for sales might not match the end user’s location, hinting at awareness of these potential loopholes as a way around U.S. restrictions.
Furthermore, China reportedly imports more chips from Singapore than from the U.S., all despite Singapore only housing 99 data centers. This amplifies concerns, particularly when considering that DeepSeek reportedly holds computational resources valued at over $1.6 billion and possesses around 10,000 NVIDIA “China-specific” H800 AI GPUs alongside 10,000 of the more advanced H100 AI chips. This indicates that China is far from being deprived of state-of-the-art AI technology, rendering U.S. preventive measures seemingly ineffective at present.
However, it’s not just Singapore under the microscope, as countries like the Philippines are also suspected of funneling chips to China. With the U.S. gearing up for a formal investigation, the stakes are high for NVIDIA, whose 20% revenue from AI could be endangered. Blocking these trade pathways could lead to profound consequences not only for NVIDIA but for the broader AI market as a whole.
