The United States is digging deeper into claims that DeepSeek managed to obtain NVIDIA’s highly sought-after AI chips by navigating through Asian middlemen, aiming to understand if there were trade bypasses involved.
Hearing about DeepSeek’s impressive AI advancements has pushed the US to tighten its grip on export limitations, with a current spotlight on potential trade loopholes. This situation underscores America’s determination to keep its technological edge from reaching potentially adversarial countries such as China. Despite stringent rounds of export controls, high-performance AI chips from NVIDIA, like the H100 models, have still found their way into regions including China. Bloomberg recently shed light on an investigation by US authorities into whether these chips were routed to Chinese companies via places like Singapore—a loophole that, if verified, could lead to significant repercussions.
Why the focus on Singapore, you ask? According to data shared by @KobeissiLetter, NVIDIA’s sales to Singapore reportedly skyrocketed by a staggering 740% since DeepSeek came into existence. Given that Singapore isn’t a major player in the AI domain, this discrepancy suggests a potential circumvention of trade barriers. Moreover, NVIDIA itself has indicated that the purchasing location and the ultimate user location might not align, hinting that these channels may be a known method to circumvent US export regulations.
Interestingly, China appears to have received more chips from Singapore than from the US, even though Singapore hosts only about 99 data centers. This raises eyebrows, especially considering that DeepSeek boasts over $1.6 billion in computational assets, including 10,000 units each of NVIDIA’s H800 AI GPUs and the superior H100 AI chips. This stockpile clearly shows that China isn’t short on advanced AI technology, bringing into question the effectiveness of US preventive measures to date.
The situation becomes even more complex as other countries, like the Philippines, are also implicated in potentially facilitating these transfers to China. With the US contemplating a formal investigation, the stakes are high for NVIDIA, whose AI-related revenue could be heavily impacted. If a decision is made to clamp down on these trade gaps, it might not only hit NVIDIA hard, but could send shockwaves through the entire AI industry.
