The US is now investigating whether DeepSeek got access to NVIDIA’s AI chips through Asian intermediaries to identify trade loopholes.
DeepSeek’s AI Achievement Has Prompted US To Toughen Up Export Restrictions, Now Possibly Investigating Trade Loopholes
After the DeepSeek fiasco, the US seems more encouraged to ensure that their in-house technology doesn’t get to other hostile nations like China. Despite aggressive rounds of export controls and restrictions, China and other nations still have access to NVIDIA’s high-end AI chips like the H100s, and in light of this, Bloomberg reports that US officials are probing whether these chips were provided to Chinese firms through nations like Singapore, which can come with severe consequences if the loophole is proven.
Well, why Singapore in particular? Based on data from @KobeissiLetter, it is claimed that NVIDIA’s sales to the nation soared by up to 740% from the date DeepSeek was founded. Given that Singapore itself isn’t involved much in the AI race, this has raised the possibilities of a loophole significantly. Interestingly, NVIDIA has admitted that the billing location might be different from the end-user location, implying that they know about possible loopholes as a workaround for US restrictions.
Did DeepSeek illegally buy Nvidia’s chips?
Since DeepSeek was founded, Nvidia’s sales to Singapore are up a WHOPPING +740%.
The US is now PROBING if DeepSeek bought Nvidia’s GPUs through third parties in Singapore.
This will have MASSIVE implications.
(a thread) pic.twitter.com/Jyxrd8zEIc
— The Kobeissi Letter (@KobeissiLetter) January 31, 2025
Moreover, China is said to have imported chips from Singapore in quantities way more than the US, and considering that Singapore is said to have only 99 data centers, the situation certainly seems alarming. For those unaware, DeepSeek is said to have computational resources worth over $1.6 billion and has around 10,000 of NVIDIA’s “China-specific” H800 AI GPUs and 10,000 of the higher-end H100 AI chips. This means that China is certainly not deprived of cutting-edge AI GPUs, which means that the US’s measures are pointless for now.
Singapore isn’t the only nation that has surfaced as a possibility since countries like the Philippines are also alleged to be involved in supplying chips to China. Now that the US is planning to launch a formal investigation, it means that NVIDIA’s 20% AI revenue is now at stake, and if the US decides to block this trade loophole, it might cause severe consequences, not just for Team Green, but the AI markets in general.