The U.S. has turned its attention towards potential legal circumventions involving NVIDIA’s advanced AI chips, examining potential involvement from Asian intermediaries.
DeepSeek’s AI Breakthrough Pushes U.S. to Intensify Export Controls and Investigate Potential Trade Gaps
Following the DeepSeek controversy, American authorities are determined to tighten their grip on technology exports to deter them from reaching adversarial nations, particularly China. Despite rigorous export restrictions, it seems that NVIDIA’s elite AI chips, such as the H100 models, are finding their way into these regions. According to a report by Bloomberg, U.S. officials are delving into the possibility that these sophisticated chips ended up in Chinese hands through intermediaries in nations like Singapore, a discovery that could lead to significant repercussions if validated.
Why focus on Singapore, you ask? Insights from @KobeissiLetter suggest that NVIDIA’s sales to Singapore surged by a staggering 740% coinciding with DeepSeek’s inception. Given that Singapore isn’t exactly a key player in the AI development race, suspicions of a trade loophole have inevitably emerged. Interestingly, NVIDIA acknowledged the possibility that products billed to one location might end up in another, admitting awareness of how these loopholes could circumvent U.S. restrictions.
Did DeepSeek illegally purchase Nvidia’s chips?
Since its inception, Nvidia’s sales to Singapore have skyrocketed +740%.
The U.S. is now examining if DeepSeek acquired Nvidia’s GPUs via third-party sources in Singapore.
This could have significant ramifications.
(a thread) pic.twitter.com/Jyxrd8zEIc
— The Kobeissi Letter (@KobeissiLetter) January 31, 2025
Adding fuel to the fire, China is reportedly importing more chips from Singapore than the U.S. itself, despite Singapore having only 99 data centers, which raises eyebrows. For context, DeepSeek is credited with amassing computational assets valued over $1.6 billion, boasting a stockpile of around 10,000 of NVIDIA’s “China-specific” H800 AI GPUs as well as 10,000 of the more advanced H100 AI chips. This indicates that Chinese entities aren’t facing a scarcity of state-of-the-art AI GPUs, rendering America’s current blockade measures ineffective for the time being.
Singapore isn’t the only region under scrutiny; nations such as the Philippines are also suspected of funneling chips into China. With the U.S. gearing up for a formal investigation, NVIDIA’s substantial AI revenue streams could potentially be jeopardized. If the U.S. government opts to clamp down on these trade workarounds, the ramifications could extend far beyond just NVIDIA, impacting the broader AI marketplace significantly.
