The United States is delving into whether DeepSeek accessed NVIDIA’s AI chips through channels in Asia, possibly exploiting trade loopholes along the way.
### DeepSeek’s AI Success Spurs Stricter Export Regulations in the U.S., and the Investigation of Trade Loopholes
In the wake of the DeepSeek controversy, the U.S. is motivated to tighten control over its advanced technology, ensuring it doesn’t end up in the hands of adversarial nations like China. Despite enforcing rigorous export controls, countries such as China still appear to have their hands on NVIDIA’s high-end AI chips like the H100s. According to Bloomberg, American officials are digging into the possibility that these chips reached Chinese companies via intermediaries in places like Singapore. If a loophole is uncovered, it could lead to serious repercussions.
Why focus on Singapore? Evidently, as reported by @KobeissiLetter, NVIDIA saw its sales to Singapore skyrocket by an astounding 740% since DeepSeek’s inception. Singapore isn’t exactly a frontrunner in the AI competition, which significantly raises suspicions of a workaround. Even NVIDIA has acknowledged that where they send the bill may not necessarily be where the chips end up, suggesting they might be aware of potential loophole exploits circumventing U.S. restrictions.
Moreover, China has reportedly imported far more chips from Singapore than from the U.S., causing eyebrows to raise given that Singapore boasts only 99 data centers. For some context, DeepSeek is armed with computational assets valued at over $1.6 billion and possesses around 10,000 of NVIDIA’s China-tailored H800 AI GPUs alongside 10,000 of the high-end H100 AI chips. This clearly indicates that China isn’t lacking top-tier AI GPUs, rendering current U.S. restrictions somewhat ineffective at this point.
Other nations, like the Philippines, are also speculated to be involved in funneling chips to China. With the U.S. gearing up for a formal investigation, NVIDIA’s 20% AI market share could be at risk. Blocking this trade loophole might not only impact NVIDIA but also shake up the AI industry as a whole in a significant way.
