The United States has ramped up its scrutiny of how DeepSeek managed to acquire NVIDIA’s sophisticated AI chips, possibly by exploiting trade loopholes through Asian intermediaries.
In response to DeepSeek’s notable breakthroughs, the U.S. is stepping up its efforts to prevent domestic technology from ending up in the hands of countries perceived as adversarial, such as China. Despite implementing stringent export controls, China, along with some other nations, still seems to be getting its hands on NVIDIA’s cutting-edge AI chips like the H100s. According to a report from Bloomberg, U.S. authorities are now investigating whether these chips have been forwarded to Chinese companies via countries like Singapore, an action that could have serious repercussions if these loopholes are confirmed.
So, why the focus on Singapore? According to data shared by @KobeissiLetter, NVIDIA’s sales to Singapore have surged by an astonishing 740% since DeepSeek emerged on the scene. Considering Singapore’s relatively minor role in the global AI race, this dramatic increase raises eyebrows about potential loopholes. What’s interesting is that NVIDIA itself has acknowledged the possibility that the location listed on the bill isn’t necessarily the same as where the chips are actually used, suggesting they may be aware of ways around U.S. restrictions.
It’s also reported that China has imported more chips from Singapore than directly from the United States, which is surprising given Singapore’s limited number of just 99 data centers. For context, DeepSeek reportedly boasts computing resources exceeding $1.6 billion, including approximately 10,000 of NVIDIA’s H800 AI GPUs tailored for China and another 10,000 high-end H100 chips. In essence, China isn’t running short on high-tech AI hardware, indicating that current U.S. sanctions appear to be ineffective.
But Singapore isn’t the only region under the microscope. Allegations have surfaced that suggest other countries, such as the Philippines, might also be partaking in sending chips to China. With the U.S. gearing up for a full-blown investigation, NVIDIA’s 20% AI revenue could be at risk, and should the U.S. succeed in closing these trade gaps, it could impact not only NVIDIA but the global AI market at large.
