The US Launches Investigation into Singapore’s Role in Supplying NVIDIA AI Chips to China

The United States finds itself in a challenging position as it dives into an investigation about whether DeepSeek has managed to obtain NVIDIA’s AI chips through intermediary countries in Asia, with the aim of identifying and addressing trade loopholes.

Recently, the success of DeepSeek in accessing these advanced AI tools has pushed U.S. officials to ramp up export restrictions, particularly focusing on preventing technology from reaching adversarial nations like China. Even with stringent controls in place, it seems that high-performance chips like NVIDIA’s H100s may have found their way to Chinese companies. This has spurred U.S. authorities to consider the possibility that these chips have been rerouted through countries such as Singapore, a development that could lead to severe repercussions if the suspicions are confirmed.

Why has Singapore attracted so much attention? The @KobeissiLetter highlights an extraordinary increase in NVIDIA’s sales to Singapore, skyrocketing by an astounding 740% since DeepSeek came into existence. Given that Singapore doesn’t have a major stake in the AI technology race itself, this surge suggests there might indeed be a trade loophole in play. NVIDIA has acknowledged the issue, indicating that the billing and end-user locations might differ, hinting at potential workarounds for U.S. export restrictions.

Digging deeper, China reportedly imports more chips from Singapore than from the U.S., despite Singapore only having about 99 data centers. This raises further concerns about the destination of these chips. DeepSeek, equipped with computing power valued at over $1.6 billion, boasts around 10,000 of NVIDIA’s “China-specific” H800 GPUs and an equal number of the high-performance H100 AI chips. This certainly indicates that China’s AI capabilities remain robust, making the U.S. efforts to curb technology transfers seem somewhat ineffective so far.

Additionally, speculation includes other countries like the Philippines, which might be similarly involved in channeling these chips to China. As the U.S. gears up for a formal investigation, NVIDIA’s AI division, which accounts for roughly 20% of their revenue, could face significant challenges. If the U.S. opts to clamp down on this loophole, it could trigger substantial impacts not only for NVIDIA but also within the broader AI industry.