The recent developments surrounding DeepSeek and the alleged acquisition of NVIDIA’s AI chips have led the US to possibly launch a deeper investigation into trade loopholes, focusing on Asian intermediaries. This scrutiny comes at a time when the US is keen to tighten export restrictions on its advanced technology to ensure it doesn’t end up in the hands of nations like China.
DeepSeek’s remarkable AI innovations have prompted a reaction from the US, leading to stricter export policies. Yet, despite these measures, it appears countries such as China still manage to access NVIDIA’s top-tier AI chips, like the H100s. Bloomberg recently highlighted that US authorities are investigating whether these advanced chips are reaching Chinese companies through intermediate countries such as Singapore. If this is found to be true, it could lead to serious ramifications.
Now, why focus on Singapore? According to data shared by @KobeissiLetter, NVIDIA’s sales in Singapore shot up by a staggering 740% since DeepSeek’s inception. As Singapore isn’t heavily involved in competing in the AI sector, this unusual increase hints at a significant loophole. NVIDIA themselves acknowledged that they are aware of the process where the billing location may not match the final destination of the goods, indicating a potential workaround to bypass US-imposed restrictions.
A recent tweet by The Kobeissi Letter sheds light on these developments, questioning whether DeepSeek has indeed been acquiring NVIDIA chips through Singaporean third parties. This situation could have a tremendous impact on the industry’s dynamics.
On top of this, China’s chip imports from Singapore have reportedly exceeded those going to the US, despite Singapore housing only 99 data centers—a number that doesn’t seem to justify such large imports. DeepSeek is believed to be equipped with computing resources worth over $1.6 billion, including 10,000 NVIDIA “China-specific” H800 AI GPUs alongside 10,000 of the more advanced H100 AI chips. This equipment means China’s AI capabilities are far from being hampered by US restrictions, bringing into question the effectiveness of these controls.
Additionally, Singapore isn’t the lone player under suspicion, with other countries like the Philippines also rumored to be in on supplying chips to China. Given the US’s potential move to formally investigate this, NVIDIA’s financial stakes are significant, with about 20% of their AI revenue potentially endangered. An action by the US to cut off this trade route could lead to severe repercussions, affecting not just NVIDIA but the global AI market at large.
