The US has launched an investigation to determine if DeepSeek obtained NVIDIA’s high-end AI chips through intermediaries in Asia, potentially exploiting trade loopholes.
In light of the DeepSeek incident, the US is ramping up efforts to prevent its advanced technology from reaching countries like China. Despite stringent export controls, countries such as China still manage to acquire NVIDIA’s premium AI chips, such as the H100 series. Bloomberg has reported that there might be an investigation into whether these chips were funneled to Chinese firms via countries like Singapore. If this loophole is confirmed, it could lead to serious repercussions.
So, why is Singapore under scrutiny? According to data from @KobeissiLetter, NVIDIA’s sales to Singapore have skyrocketed by an astonishing 740% since DeepSeek emerged. Since Singapore isn’t a major player in the AI arena, this discrepancy has raised suspicions of a possible loophole. Interestingly, NVIDIA has acknowledged that their chips’ billing location can differ from the actual end-user location, hinting at their awareness of these potential workarounds to US export restrictions.
Moreover, China reportedly imports more chips from Singapore than the US itself. Given that Singapore houses only 99 data centers, this statistic raises further alarm bells. For context, DeepSeek is said to manage computational resources valued at over $1.6 billion and possesses about 10,000 of NVIDIA’s “China-specific” H800 AI GPUs and an equal number of the top-tier H100 AI chips. Clearly, China isn’t lacking in access to cutting-edge AI technology, suggesting that current US measures might be falling short.
It’s worth noting that Singapore isn’t the only nation under suspicion; countries like the Philippines are also thought to potentially aid in supplying chips to China. With the US considering a formal investigation, NVIDIA’s AI revenue stream, which accounts for about 20%, may face significant threats. Should the US decide to crack down on these trade loopholes, it could lead to expansive consequences, affecting not just NVIDIA but the wider AI market as a whole.
