The ongoing investigation by the United States into how DeepSeek might have circumvented trade regulations to obtain NVIDIA’s advanced AI chips through Asian intermediaries highlights growing concerns over technology exports.
The recent achievements of DeepSeek have spurred the US to tighten its export rules to prevent their cutting-edge technology from falling into the hands of rival nations like China. Despite these stringent measures, NVIDIA’s sophisticated AI chips, particularly the H100 series, seem to have found their way into Chinese companies. Bloomberg has noted that US authorities are now scrutinizing whether these chips were routed through countries such as Singapore. If such a loophole exists, it could have significant repercussions.
So, why the focus on Singapore? Data from @KobeissiLetter indicates that NVIDIA’s transactions with Singapore surged by a remarkable 740% since DeepSeek’s inception. Considering Singapore’s relatively mild involvement in the AI industry, these spikes suggest the potential existence of a workaround to bypass US restrictions. NVIDIA has acknowledged that the billing address might not always match the end-user location, hinting at their awareness of such possible loopholes.
A Twitter thread by The Kobeissi Letter even questions whether DeepSeek illicitly procured NVIDIA’s GPUs through Singaporean intermediaries, an act that could lead to substantial implications if verified.
Additionally, reports suggest China’s chip imports from Singapore far exceed those of the US. With Singapore housing only 99 data centers, the magnitude of such transactions raises eyebrows. DeepSeek is reportedly equipped with computational resources valued at over $1.6 billion, holding approximately 10,000 of NVIDIA’s “China-specific” H800 AI GPUs along with another 10,000 of the advanced H100 AI chips. This inventory indicates China isn’t lacking in high-caliber AI hardware, rendering US preventative measures ineffective for the time being.
Furthermore, Singapore isn’t the sole country under the spotlight. Reports implicate other nations, like the Philippines, in potentially supplying chips to China. With the US poised to initiate a formal investigation, NVIDIA’s revenue from AI, which constitutes about 20%, could be jeopardized if the loopholes are indeed shut down. This action might not only impact NVIDIA but could have broader consequences across the AI industry.
