The United States has started looking into whether DeepSeek accessed NVIDIA’s AI chips via intermediaries in Asia, attempting to find potential trade loopholes.
DeepSeek’s AI Breakthrough Pushes the US to Tighten Export Controls and Examine Trade Loopholes
The recent situation involving DeepSeek has spurred the US to double down on efforts to prevent its indigenous technology from reaching adversarial countries like China. Although there have been several rigorous rounds of export controls and restrictions, nations such as China are still managing to get their hands on NVIDIA’s top-tier AI chips, including the H100s. As Bloomberg highlights, US authorities are now investigating if these chips somehow found their way to Chinese companies through places like Singapore, which, if true, could have serious repercussions.
So, why is Singapore under scrutiny? According to @KobeissiLetter, there’s been a staggering 740% increase in NVIDIA’s sales to Singapore since DeepSeek was started. Singapore’s relatively modest position in the AI arena raises significant red flags about a possible loophole. NVIDIA has also mentioned that the location listed on the bill might not necessarily match the actual end-user location, suggesting they’re aware of how such loopholes might be exploited to bypass US restrictions.
Did DeepSeek illegally buy Nvidia’s chips?
Since DeepSeek was founded, Nvidia’s sales to Singapore are up a WHOPPING +740%.
The US is now PROBING if DeepSeek bought Nvidia’s GPUs through third parties in Singapore.
This will have MASSIVE implications.
(a thread) pic.twitter.com/Jyxrd8zEIc
— The Kobeissi Letter (@KobeissiLetter) January 31, 2025
Furthermore, the volume of chips exported from Singapore to China is reportedly much higher than what goes to the US, which is particularly concerning since Singapore only houses 99 data centers. If you’re unfamiliar, DeepSeek is reported to boast computational resources valued at over $1.6 billion and is said to have acquired around 10,000 of NVIDIA’s H800 AI GPUs crafted specifically for China, along with another 10,000 of the premium H100 AI chips. This clearly indicates that China is not lacking in terms of cutting-edge AI hardware, casting doubt over the effectiveness of US restrictions at present.
Singapore’s not the only nation under the microscope; countries like the Philippines are also suspected of channeling chips to China. With the US gearing up for a formal probe, NVIDIA’s 20% revenue from AI stands at risk. If the US opts to shut down this trade loophole, the fallout could extend beyond just NVIDIA, impacting the wider AI markets significantly.
