The U.S. is taking a closer look into how DeepSeek might have managed to get NVIDIA’s AI chips through Asian intermediaries, potentially exploiting trade loopholes.
Tightening the Screws: DeepSeek’s AI Feat Triggers U.S. to Scrutinize Export Gaps
In the wake of the DeepSeek debacle, the U.S. is doubling down on its efforts to prevent advanced technology from landing in the hands of adversarial nations like China. Even with stringent export controls in place, countries such as China still find ways to procure NVIDIA’s cutting-edge AI chips, including the coveted H100 models. According to Bloomberg, American authorities are now examining whether these critical components have ended up with Chinese companies via countries like Singapore, a situation that could lead to dire outcomes if a loophole is validated.
Why is Singapore under the microscope? Data from @KobeissiLetter reveals that NVIDIA’s sales to Singapore skyrocketed by an eye-popping 740% since DeepSeek came onto the scene. With Singapore not particularly known for being a major player in the AI sector, suspicions of a loophole have intensified. NVIDIA has even acknowledged that the billing location of their chips might differ from their ultimate destination, suggesting an awareness of potential bypasses in U.S. restrictions.
Moreover, there’s chatter that China is importing significant volumes of chips from Singapore, far surpassing what comes directly from the U.S. Considering Singapore houses only 99 data centers, this discrepancy raises eyebrows. DeepSeek, for those unfamiliar, is reputed to command computational firepower valued at over $1.6 billion, consisting of around 10,000 “China-specific” H800 AI GPUs and another 10,000 top-tier H100 AI chips. Consequently, it appears that China remains far from short on state-of-the-art AI technologies, challenging the efficacy of American export restrictions for the time being.
The spotlight on Singapore isn’t exclusive as other nations like the Philippines are also suggested to be involved in forwarding chips to China. With the U.S. gearing up for an official investigation, NVIDIA’s 20% revenue from AI technology sales hangs in the balance. Should the U.S. decide to seal this trade loophole, the ramifications could echo throughout NVIDIA and the broader AI markets, shaking things up considerably.
