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On Thu, 20 Feb, 12:03 AM UTC
2 Sources
[1]
US investigates whether DeepSeek obtained Nvidia chips through Singapore to bypass restrictions
The big picture: Singapore has found itself at the center of an investigation into the distribution of Nvidia's advanced semiconductors. The inquiry comes as Washington examines whether Chinese AI startup DeepSeek has been acquiring chips through the Southeast Asian nation, potentially circumventing US export controls. Singapore's Second Minister for Trade and Industry, Tan See Leng, addressed the issue in a statement to lawmakers. According to Tan, while Nvidia reported that 22 percent of its sales in the August-October 2023 period were attributed to Singapore, this figure primarily reflects billing practices rather than physical product delivery. Tan emphasized that the actual physical delivery of Nvidia products to Singapore represents less than one percent of Nvidia's overall revenue for the three-month period ending in October 2023. These deliveries were primarily for major enterprises and government use within Singapore. The discrepancy between billing attribution and physical delivery is not unique to Nvidia or Singapore. Tan explained that it is common practice for global entities to centralize billing for procured goods and services in their hubs, separate from where products are shipped. This strategy allows multinational companies operating across borders to streamline their financial operations, often billing everything through their headquarters address while shipping items directly to where they're needed. Nvidia has long acknowledged this practice in its financial reporting, stating that revenue by geographic area is based on the billing location of the customer, which may differ from the end customer and shipping location. Singapore's position in this matter is particularly sensitive due to its close ties with both China and the United States. The country has become a hub for many Chinese tech companies, including ByteDance's TikTok, which has its headquarters in Singapore. Meanwhile, Singapore considers the US a key strategic partner in trade and politics, with significant military cooperation. The ongoing US-China trade tensions and technology restrictions have put Singapore in a challenging position. The country is keen to maintain its reputation as a business-friendly hub while also complying with international regulations and export controls. In response to the allegations surrounding DeepSeek's acquisition of Nvidia chips, Tan assured that the Singapore government is cooperating fully with US authorities to investigate the matter. He emphasized that Singapore does not condone any businesses using their Singaporean address to circumvent export controls set by other countries. The investigation comes in the wake of DeepSeek's release of a chatbot called R1, which has demonstrated capabilities comparable to US-developed tools. This development has raised questions about China's progress in AI technology and whether this progress has relied on Western technology.
[2]
Did China's DeepSeek smuggle banned Nvidia GPUs via Singapore? U.S investigators close to revealing the source, as the island nation may be in the line of Washington's fire
US investigators are exploring if DeepSeek used Singapore to smuggle banned Nvidia GPUs to China. Only a fraction of Nvidia's sales physically reach Singapore despite accounting for significant revenue, as per the ministry. Singapore balances its commercial and political ties with China and the US. The island nation is coordinating with the US to avoid misuse of its business ecosystem.US investigators are examining whether Chinese AI company DeepSeek used Singapore as a smuggling hub to export banned Nvidia GPUs to China, as per a report. Singapore's second minister for trade and industry, Tan See Land said that only a fraction of Nvidia's sales in the country actually make it into the country, reported Bloomberg. According to Tan, the physical delivery of products sold by Nvidia to Singapore represents less than 1% of Nvidia's overall revenue. However, there were claims that Singapore accounted for nearly 28% of Nvidia's revenue in 2024, as per Tom's Hardware report. Tan explained that global companies have a common practice to centralize the billing for procured goods and services in their hubs. But it is separate from where the products actually get shipped from there and can also be delivered to another country, as per the report. Tan said "If you're operating in different countries, it's sometimes more cost-effective to bill everything using the headquarters address and then have the items shipped directly to where they're needed," as quoted by Tom's Hardware report. Even Nvidia has claimed officially that revenue by geographic area is based on the billing location of the customer. Nvidia also mentioned that the end customer and shipping location may be different from the customer's billing location. Nvidia stated that "most shipments associated with Singapore revenue were to locations other than Singapore and shipments to Singapore were insignificant," as quoted in the report. Even though Singapore has always had robust commercial links with China, especially the technology sector where firms like TikTok parent ByteDance have major operations, according to the report. The island nation also has an important strategic relationship with the US in politics and trade, reported Tom's Hardware. According to the report, Singapore has to carefully balance its relations with both China and the United States as there are trade tensions between the two nations. Singapore wants to avoid being placed on the US entity list because doing so would place restrictions, especially in the technology sector. According to Tom's Hardware, Tan assured that Singapore is coordinating closely with the US authorities to check for any abuse of its business ecosystem, and also ensured that Singaporean address is not used to get around export controls set by other countries. Why is the US investigating Nvidia's business in Singapore? The US is investigating whether the Chinese AI company DeepSeek used Singapore as a hub to smuggle banned Nvidia GPUs to China. How much of Nvidia's revenue comes from Singapore? While it was reported that Singapore accounted for nearly 28% of Nvidia's revenue in 2024. However, according to Singapore's second minister for trade and industry, Tan See Land, less than 1% of Nvidia's overall revenue came from physical shipments to the country.
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The US is investigating whether Chinese AI startup DeepSeek acquired Nvidia chips through Singapore, potentially bypassing export restrictions. This probe highlights the complex interplay of global tech trade, export controls, and geopolitical tensions.
The United States has initiated an investigation into whether Chinese AI startup DeepSeek has been acquiring advanced Nvidia semiconductors through Singapore, potentially circumventing US export controls. This probe has thrust Singapore into the spotlight, highlighting the complex dynamics of global tech trade and geopolitical tensions 12.
Singapore's Second Minister for Trade and Industry, Tan See Leng, addressed the issue, clarifying the discrepancy between Nvidia's reported sales figures and actual physical deliveries to the country. While Nvidia attributed 22% of its sales in the August-October 2023 period to Singapore, Tan emphasized that physical deliveries to Singapore represent less than 1% of Nvidia's overall revenue for that period 1.
Tan explained that this discrepancy is due to common global business practices:
"If you're operating in different countries, it's sometimes more cost-effective to bill everything using the headquarters address and then have the items shipped directly to where they're needed," 2.
The investigation has shed light on the complexities of international business operations. Multinational companies often centralize billing in their hubs, separate from where products are physically shipped. Nvidia acknowledges this practice in its financial reporting, stating that revenue by geographic area is based on the billing location of the customer, which may differ from the end customer and shipping location 1.
Singapore finds itself in a delicate position due to its close ties with both China and the United States:
The ongoing US-China trade tensions and technology restrictions have put Singapore in a challenging position as it strives to maintain its reputation as a business-friendly hub while complying with international regulations and export controls 1.
The investigation comes in the wake of DeepSeek's release of a chatbot called R1, which has demonstrated capabilities comparable to US-developed tools. This development has raised questions about China's progress in AI technology and whether this progress has relied on Western technology 1.
Tan assured that the Singapore government is cooperating fully with US authorities to investigate the matter. He emphasized:
"Singapore does not condone any businesses using their Singaporean address to circumvent export controls set by other countries." 1
The country is keen to avoid being placed on the US entity list, which would impose restrictions, especially in the technology sector 2.
As the investigation unfolds, it underscores the intricate balance between fostering innovation, maintaining international partnerships, and adhering to global trade regulations in the rapidly evolving landscape of AI and advanced semiconductor technologies.
Reference
[1]
The US government launches a probe into Chinese AI startup DeepSeek's potential acquisition of advanced NVIDIA GPUs through Singapore, raising concerns about the effectiveness of export controls and the impact on the global AI industry.
9 Sources
9 Sources
Singapore authorities have launched a probe into the alleged smuggling of Nvidia AI chips, potentially violating US export controls. The case involves servers from Dell and Super Micro, raising concerns about the global AI supply chain and regulatory compliance.
20 Sources
20 Sources
The U.S. Department of Commerce has asked Nvidia to investigate how its advanced AI chips are ending up in China despite export restrictions. Nvidia has turned to distributors like Super Micro Computer and Dell to conduct spot checks on customers in Southeast Asia.
5 Sources
5 Sources
Singapore authorities have added new charges in a server fraud case potentially involving Nvidia AI chips, while Malaysia investigates possible breaches of local laws in related shipments. The case has drawn international attention due to concerns about AI chip smuggling to China.
4 Sources
4 Sources
Malaysia is set to implement stricter regulations on semiconductor shipments, particularly Nvidia GPUs, following U.S. pressure to prevent the flow of advanced AI chips to China. This move comes amid investigations into potential breaches of export controls and fraudulent activities.
7 Sources
7 Sources
