The United States is currently delving into whether DeepSeek managed to acquire NVIDIA’s AI chips by navigating through Asian intermediaries, aiming to pinpoint any trade loopholes.
In the wake of DeepSeek’s significant strides in AI, the US has been spurred to tighten export restrictions, potentially uncovering and closing trade loopholes. Efforts to keep American technology from falling into the hands of nations like China have been persistent, but there are still cracks. Despite strict export controls, China, alongside other countries, seems to have access to NVIDIA’s top-of-the-line AI chips, like the H100s. According to Bloomberg, US officials are investigating whether these semiconductors were indirectly supplied to Chinese companies through countries such as Singapore. If such loopholes are verified, the implications could be considerable.
So, why focus on Singapore? According to data shared by @KobeissiLetter, NVIDIA’s sales to Singapore skyrocketed by an astonishing 740% after DeepSeek came into the picture. Considering that Singapore isn’t a notable contender in the AI technology race, this dramatic increase suggests a potential loophole. Even NVIDIA acknowledges that the billing address can differ from where the product ends up, hinting that they are aware of possible workaround scenarios concerning US restrictions.
Adding to the concern, Singapore’s chip re-exportations to China have reportedly outstripped those from the US. It’s worth noting that Singapore only hosts about 99 data centers, which raises some red flags. For those not in the loop, DeepSeek is reputed to possess extensive computational resources valued at over $1.6 billion, including thousands of NVIDIA’s high-performance AI GPUs, both the "China-specific" H800 and the more sophisticated H100 models. This indicates China’s AI abundance, rendering US restrictions somewhat ineffective for the present.
It’s not just Singapore under the microscope; other countries like the Philippines are also suggested to be part of this supply chain to China. With a formal investigation on the horizon, NVIDIA’s substantial AI revenue could be at risk. Shutting down this trade route could lead to far-reaching repercussions, affecting not only Team Green but the broader AI market landscape.
