The recent developments concerning DeepSeek have spurred the United States to ramp up its efforts in tightening export restrictions, especially regarding AI technology. The US government is reportedly scrutinizing potential trade loopholes that might have allowed DeepSeek to acquire NVIDIA’s advanced AI chips through intermediaries in Asia, specifically targeting the channels that could be exploited to bypass restrictions.
Following the DeepSeek controversy, there’s a noticeable urgency in the US to protect its advanced tech from reaching potentially adversarial nations, like China, despite having implemented several stringent export controls. However, reports from Bloomberg suggest ongoing concerns that some foreign companies, particularly in nations such as Singapore, may have found ways around these rules. This has led to US officials investigating if these state-of-the-art chips, particularly the much-coveted H100 models, were indeed illicitly funneled to Chinese entities through such avenues.
The question arises: why the focus on Singapore? Data floated by sources such as @KobeissiLetter indicate a staggering 740% surge in NVIDIA’s sales to Singapore around the time DeepSeek was founded. Given that Singapore isn’t exactly a frontrunner in the AI domain, suspicions have naturally arisen regarding this uptick potentially being a front for unregulated distribution. NVIDIA itself has acknowledged the discrepancy between billing locations and end-user destinations, hinting they are aware of potential workarounds that circumvent US-imposed export limitations.
Supporting this, a tweet by The Kobeissi Letter posits: “Did DeepSeek illegally buy Nvidia’s chips?… The US is now PROBING if DeepSeek bought Nvidia’s GPUs through third parties in Singapore. This will have MASSIVE implications.”
Additionally, reports suggest China’s import volumes from Singapore have outstripped those from the US, a concerning data point considering Singapore hosts just 99 data centers. For context, DeepSeek is estimated to wield computational power valued at over $1.6 billion, featuring around 10,000 of NVIDIA’s H800 and H100 AI chips, tailored specifically for the Chinese market. Clearly, US export measures haven’t fully curtailed access to these high-powered AI components.
So far, Singapore isn’t alone under the microscope. Allegations have also surfaced implicating countries like the Philippines in the indirect supply chain enabling China. With a formal investigation looming, NVIDIA’s substantial AI revenue streams—comprising about 20% of its income—could be seriously impacted. Should the US succeed in sealing these loopholes, the repercussions would reverberate not only through NVIDIA but across the broader AI industry.
