US Investigates Potential Circumvention of AI Chip Export Controls via Singapore

Singapore responds to accusations of smuggling illegal NVIDIA GPUs to China

TL;DR: Questions have been raised about Singapore's reported role as an intermediary for China to acquire NVIDIA GPUs, which the US government has banned. The unveiling of the DeepSeek R1 AI model has caused the AI industry to turn on its head, with accusations now flying around about the theft of data sets and the circumvention of US trade restrictions on NVIDIA hardware. The latter has caused quite a stir, with the US government announcing it has launched a probe into China's potentially illegal use of NVIDIA AI GPUs that industry experts have suggested were used to train DeepSeek's AI. Government officials, and in particular, Howard Lutnick, President Donald Trump's pick to lead the Commerce Department, insinuated DeepSeek circumvented US trade policies by using intermediaries to acquire NVIDIA's hardware. Notably, the US government has already banned the trade of these high-end NVIDIA GPUs in more than countries as it believes these countries could be used as intermediaries for China. However, Singapore isn't banned, and consists of approximately 20% of NVIDIA's revenue. The speculation that Singapore is being used as an intermediary for China's expansive AI training has been heard by NVIDIA, which responded with a spokesperson saying, "End customer and shipping location may be different from our customer's billing location. For example, most shipments associated with Singapore revenue were to locations other than Singapore and shipments to Singapore were insignificant," the company stated in its most recent financial filings." These concerns have now caused a response by Singapore's Ministry of Trade and Industry, which issued a statement on February 1st, writing, "Singapore is an international business hub. Major US and European companies have significant operations here. NVIDIA has explained that many of these customers use their business entities in Singapore to purchase chips for products destined for the US and other Western countries."

The US Is Now Investigating Whether Singapore Is Responsible For Supplying NVIDIA's AI Chips To China; Team Green's 20% AI Revenue Now At Stake

The US is now investigating whether DeepSeek got access to NVIDIA's AI chips through Asian intermediaries to identify 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. 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.

US officially launches probe into DeepSeek over illegal use of NVIDIA chips

TL;DR: DeepSeek's R1 model, developed for $6 million, challenges OpenAI's $100 million model, causing a $1 trillion impact on AI companies like NVIDIA. The US government is investigating if DeepSeek used banned NVIDIA chips via intermediaries. DeepSeek unveiling its R1 model has completely shaken up the AI industry as the company claims its model is comparable to OpenAI's most advanced AI model, which took approximately $100 million to create. However, DeepSeek says it only spent $6 million to make R1. The disparity between the development costs of OpenAI's o1 model and DeepSeeks R1 model put the industry in a tailspin, causing approximately $1 trillion to be wiped away from AI companies, particularly NVIDIA, the company providing the horsepower necessary to train these models. A part of the reason NVIDIA took such a stock hit was DeepSeek, saying it trained its R1 model using H800 GPUs, which were released in 2023. The sentiment is - why pay for new and expensive NVIDIA hardware when the same or comparable results to what is considered the best AI model can be generated using hardware from 2023? Well, the US government intends to find out if these claims are true as a new article from Bloomberg states the White House and the FBI have now officially launched a probe into DeepSeek to determine if the company used intermediaries to acquire high-end NVIDIA AI chips the US has banned explicitly from being sold to China. Howard Lutnick, President Donald Trump's pick to lead the Commerce Department, insinuated DeepSeek circumvented US trade policies on Wednesday, saying, "NVIDIA's chips, which they bought tons of, and they found their ways around it, drive their DeepSeek model. It's got to end. If they are going to compete with us, let them compete, but stop using our tools to compete with us. So I'm going to be very strong on that." Notably, DeepSeek stated in its research paper that it used 2,048 H800 chips to train its R1 model, which NVIDIA created for the Chinese market after the semiconductor limitations were imposed on China for NVIDIA's highest-end AI GPUs. Moreover, US officials then banned H800 chips from being sold in China, which caused NVIDIA to design a new, less powerful chip for that market. That chip was called the H20. The trade policy debates haven't stopped there as the US government is concerned intermediaries will be used by China to get its hands on the most-advanced AI GPUs. As a result of this concern, the US government has banned the trade of these GPUs to now more than 40 countries that could serve as intermediaries for China, which includes some of Southeast Asia and the majority of the Middle East. But not Singapore. Regulatory filings indicate Singapore accounts for approximately 20% of NVIDIA's revenue, but according to an NVIDIA spokesperson, the revenue associated with Singapore doesn't indicate diversion to China.

US Probing Whether DeepSeek Got Nvidia Chips Through Singapore

US officials are probing whether Chinese AI startup DeepSeek bought advanced Nvidia Corp. semiconductors through third parties in Singapore, circumventing US restrictions on sales of chips used for artificial intelligence tasks, people familiar with the matter said. DeepSeek recently released a chatbot, called R1, that in some respects performs as well as comparable tools from the US, suggesting that China is further ahead in the AI race than previously believed. Some prominent engineers have marveled at R1's capabilities, and DeepSeek has touted the tool's low cost and efficiency, prompting rivals to speculate whether it was built on the back of Western technology.

US Probing If DeepSeek Got Nvidia Chips From Firms in Singapore

Sources tell Bloomberg that US officials are probing whether Chinese startup DeepSeek bought advanced Nvidia semiconductors through third parties in Singapore. As Tom Giles reports, that move would have circumvented Washington's restrictions on sales of chips used for AI tasks. (Source: Bloomberg)

US Probes DeepSeek Over Use of Restricted Nvidia Chips

Disclaimer: This content generated by AI & may have errors or hallucinations. Edit before use. Read our Terms of use The United States Department of Commerce is looking into whether Chinese tech company DeepSeek used US chips, which are restricted from being exported to China, to support its operations, as per a Reuters report referring to those familiar with the development. While releasing its AI Chatbot, DeepSeek recently claimed that its models were built at a fraction of the cost compared to established models from existing US AI companies such as OpenAI because it uses fewer advanced chips. The chatbot subsequently claimed the top spot in Apple's App Store in the US, above market rivals like ChatGPT. Violations on the part of DeepSeek? Recent allegations suggest that DeepSeek may possess up to 50,000 Nvidia H100 chips despite export curbs. This assigns prominence to current developments, especially in light of an executive order passed by the erstwhile Biden administration that required AI companies to acquire licenses for exporting chips to countries of concern, including China, Russia and others. While no clear answers can be provided at the moment as to how DeepSeek would possibly accumulate a stockpile of chips, the Reuters report states, referring to sources, that organised AI chip smuggling to China has been tracked from several countries, including Malaysia, Singapore, and the United Arab Emirates. Export curbs, but to what extent? Chipmaker Nvidia has arguably been the most affected third party in the the ongoing US-China chip war, with US imposing chip export curbs on at least 140 companies in China. This impacted Nvidia's share in China's sizable AI chip market. The latter subsequently launched an antitrust violation probe into Nvidia. The rout in US stock markets that saw AI stocks being sold off following the release of DeepSeek R1 also hit Nvidia the hardest, with the company shedding $593 billion in market capitalisation and its stock prices dipping 17%. Domestic Pressure Meanwhile, two members of the United States Congress, John Moolenaar and Raja Krishnamoorthi, have called on the administration to impose stronger export controls on Nvidia chips. The duo focused on the export of the H20 chip, which at the moment lies outside the scope of restrictions, and even a tougher stance on chip shipments to Singapore.

US looking into whether DeepSeek used restricted AI chips, source says

(Reuters) - The U.S. Commerce Department is looking into whether DeepSeek - the Chinese company whose AI model's performance rocked the tech world - has been using U.S. chips that are not allowed to be shipped to China, a person familiar with the matter said. China's DeepSeek last week launched a free assistant it says uses less data at a fraction of the cost of U.S. models. Within days, it became the most downloaded app in Apple's App Store and stirred concerns about United States' lead in AI, sparking a rout that wiped around $1 trillion off U.S. technology stocks. Current restrictions on Nvidia artificial intelligence processors are meant to stop its most sophisticated chips from reaching China. Organized AI chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates, the source said. The Commerce Department and DeepSeek did not immediately return requests for comment. An Nvidia spokesperson said many of its customers have business entities in Singapore and use those entities for products destined for the U.S. and the west. "We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, act accordingly," Nvidia said. DeepSeek has said it used Nvidia's H800 chips, which it could have legally purchased in 2023. Reuters could not determine whether DeepSeek has used other controlled chips that are not allowed to be shipped to China. DeepSeek also apparently has Nvidia's less powerful H20s, which can still lawfully be shipped to China. The U.S. considered controlling them under the Biden administration and newly appointed Trump officials are discussing that as well. The CEO of AI company Anthropic, Dario Amodei, said earlier this week, "it appears that a substantial fraction of DeepSeek's AI chip fleet consists of chips that haven't been banned (but should be), chips that were shipped before they were banned; and some that seem very likely to have been smuggled." The U.S. has put in place a raft of restrictions barring exports of AI chips to China and plans to cap their shipments to a host of other countries. (Reporting by Karen Freifeld; editing by Chris Sanders and Himani Sarkar)

US looking into whether DeepSeek used restricted AI chips: source

Nvidia and DeepSeek logos are seen in this illustration, Jan. 27. Reuters-Yonhap The U.S. Commerce Department is looking into whether DeepSeek -- the Chinese company whose AI model's performance rocked the tech world -- has been using U.S. chips that are not allowed to be shipped to China, a person familiar with the matter said. China's DeepSeek last week launched a free assistant it says uses less data at a fraction of the cost of U.S. models. Within days, it became the most downloaded app in Apple's App Store and stirred concerns about United States' lead in AI, sparking a rout that wiped around $1 trillion off U.S. technology stocks. Current restrictions on Nvidia artificial intelligence processors are meant to stop its most sophisticated chips from reaching China. Organized AI chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates, the source said. Seoul shares sharply down late Friday morning on tech slide 2025-01-31 13:39 | Markets The Commerce Department and DeepSeek did not immediately return requests for comment. An Nvidia spokesperson said many of its customers have business entities in Singapore and use those entities for products destined for the U.S. and the west. "We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, act accordingly," Nvidia said. DeepSeek has said it used Nvidia's H800 chips, which it could have legally purchased in 2023. Reuters could not determine whether DeepSeek has used other controlled chips that are not allowed to be shipped to China. DeepSeek also apparently has Nvidia's less powerful H20s, which can still lawfully be shipped to China. The U.S. considered controlling them under the Biden administration and newly appointed Trump officials are discussing that as well. The CEO of AI company Anthropic, Dario Amodei, said earlier this week, "it appears that a substantial fraction of DeepSeek's AI chip fleet consists of chips that haven't been banned (but should be), chips that were shipped before they were banned; and some that seem very likely to have been smuggled." The U.S. has put in place a raft of restrictions barring exports of AI chips to China and plans to cap their shipments to a host of other countries. (Reuters)

US Said to Be Probing DeepSeek's Alleged Use of Restricted AI Chips

China's DeepSeek launched a free assistant last week Deepseek claims this AI model uses less data than US models The Chinese firm said it used Nvidia's H800 chips purchased in 2023 The US Commerce Department is looking into whether DeepSeek - the Chinese company whose AI model's performance rocked the tech world - has been using US chips that are not allowed to be shipped to China, a person familiar with the matter said. China's DeepSeek last week launched a free assistant it says uses less data at a fraction of the cost of US models. Within days, it became the most downloaded app in Apple's App Store and stirred concerns about United States' lead in AI, sparking a rout that wiped around $1 trillion (roughly Rs. 86,63,626 crore) off US technology stocks. Current restrictions on Nvidia Artificial Intelligence (AI) processors are meant to stop its most sophisticated chips from reaching China. Organised AI chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates, the source said. The Commerce Department and DeepSeek did not immediately return requests for comment. An Nvidia spokesperson said many of its customers have business entities in Singapore and use those entities for products destined for the US and the west. "We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, act accordingly," Nvidia said. DeepSeek has said it used Nvidia's H800 chips, which it could have legally purchased in 2023. Reuters could not determine whether DeepSeek has used other controlled chips that are not allowed to be shipped to China. DeepSeek also apparently has Nvidia's less powerful H20s, which can still lawfully be shipped to China. The US considered controlling them under the Biden administration and newly appointed Trump officials are discussing that as well. The CEO of AI company Anthropic, Dario Amodei, said earlier this week, "it appears that a substantial fraction of DeepSeek's AI chip fleet consists of chips that haven't been banned (but should be), chips that were shipped before they were banned; and some that seem very likely to have been smuggled." The US has put in place a raft of restrictions barring exports of AI chips to China and plans to cap their shipments to a host of other countries. © Thomson Reuters 2025