The United States is currently delving into whether DeepSeek managed to procure NVIDIA’s advanced AI chips via intermediaries in Asia, possibly exploiting gaps in trade regulations.
In response to DeepSeek’s recent developments, the US is cracking down on export restrictions, aiming to ensure that its advanced technologies don’t fall into the hands of adversarial nations like China. Despite rigorous export controls, these nations, including China, still appear to have access to NVIDIA’s top-tier AI chips, such as the H100s. According to Bloomberg, American officials are examining if these chips were indirectly supplied to Chinese companies via countries like Singapore. If such loopholes are confirmed, the implications could be significant.
Why is there a focus on Singapore, you ask? Data from @KobeissiLetter suggests that NVIDIA’s sales to Singapore skyrocketed by a staggering 740% since DeepSeek’s inception. Given that Singapore isn’t exactly a frontrunner in the AI competition, this surge suggests a potential loophole. NVIDIA has even acknowledged that where they bill and where the chips end up might differ, indicating awareness of a possible workaround of U.S. regulations.
A recent Twitter thread by The Kobeissi Letter also speculated about potential illegal acquisitions of NVIDIA chips by DeepSeek through third parties in Singapore, raising concerns about the ramifications of such transactions.
Adding to the suspicion, China reportedly imports more chips from Singapore than from the US, despite Singapore having only 99 data centers. This discrepancy raises eyebrows, especially as DeepSeek reportedly possesses over $1.6 billion in computational assets, including 10,000 of both NVIDIA’s “China-specific” H800 AI GPUs and their high-end H100 AI chips. This suggests that China, despite restrictions, is equipped with advanced AI hardware, undermining U.S. efforts to constrain access.
Interestingly, Singapore isn’t the sole suspect. Other countries, like the Philippines, have also been rumored to play a role in facilitating chip supplies to China. With the US now planning a formal investigation, 20% of NVIDIA’s AI revenue could potentially be jeopardized. Should these trade loopholes be sealed, it would have profound consequences not only for NVIDIA but for the broader AI industry as well.
