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The U.S. government is taking a closer look at how DeepSeek might have obtained NVIDIA’s AI chips, possibly through intermediaries in Asia, to find and close any trade loopholes.
### DeepSeek’s AI Success Spurs U.S. to Further Tighten Export Controls, Investigating Trade Loopholes
The situation with DeepSeek has prompted the U.S. to intensify its efforts to prevent advanced domestic technology from reaching nations deemed adversarial, such as China. Despite a barrage of export controls, it appears China and others can still acquire NVIDIA’s top-tier AI chips, like the H100 models. According to Bloomberg, U.S. authorities are investigating whether these chips found their way to Chinese companies through countries like Singapore, which, if confirmed, could lead to serious repercussions.
You might wonder, why focus on Singapore? Research from @KobeissiLetter highlights that NVIDIA’s sales to Singapore spiked by a staggering 740% since DeepSeek was established. Given Singapore’s relatively minor role in the global AI landscape, this raises significant suspicions about a possible trade loophole. NVIDIA has acknowledged that the location where a purchase is billed may differ from where the product ends up, hinting they are aware of potential workarounds to U.S. restrictions.
Moreover, it’s reported that China has imported more chips from Singapore than from the U.S., quite startling considering Singapore’s limited infrastructure, boasting only 99 data centers. For context, DeepSeek reportedly holds over $1.6 billion in computational assets, including around 10,000 of NVIDIA’s H800 AI GPUs tailored for China and another 10,000 of the more advanced H100 chips. This indicates that China is far from lacking state-of-the-art AI components, rendering current U.S. efforts somewhat ineffective.
It’s worth noting that Singapore isn’t alone in this quagmire; the Philippines is also suspected of channeling these chips to China. With the U.S. gearing up for a formal investigation, NVIDIA could see its AI revenue, which constitutes 20%, hang in the balance. Blocking this apparent loophole could have sweeping ramifications not only for NVIDIA but could also ripple across the broader AI industry.
