The United States has recently turned its attention to the possibility of DeepSeek acquiring NVIDIA’s advanced AI chips through Asian intermediaries, with particular focus on uncovering any trade loopholes. In response to DeepSeek’s actions, the U.S. is determined to tighten export restrictions to prevent its cutting-edge technology from reaching adversarial countries like China. Despite rigorous export controls, high-performance NVIDIA AI chips such as the H100 series still seem to find their way into Chinese hands. According to a report by Bloomberg, there’s an ongoing investigation into whether these chips ended up in China via other countries like Singapore, which could lead to significant repercussions if a loophole is indeed exposed.
Now, why has Singapore become a focal point in this investigation? According to data from @KobeissiLetter, NVIDIA’s sales to Singapore have skyrocketed by an astonishing 740% since the inception of DeepSeek. Given Singapore’s relatively low profile in the AI industry, this surge in sales suggests the presence of a trade loophole. Notably, NVIDIA has acknowledged that the billing location might differ from the end-user location, hinting at the tech giant’s awareness of how these loopholes might be circumventing U.S. restrictions.
Interestingly, China appears to be importing chips from Singapore in quantities that surpass those imported directly from the U.S., even though Singapore hosts only about 99 data centers. This discrepancy raises serious concerns. For context, DeepSeek reportedly has access to over $1.6 billion in computational resources, including around 10,000 NVIDIA H800 AI GPUs tailored for China and another 10,000 of the more advanced H100 AI chips. Clearly, China isn’t lacking in state-of-the-art AI technology, rendering U.S. restrictions seemingly ineffective at present.
The plot thickens as other nations like the Philippines are also under scrutiny for potentially facilitating chip supplies to China. With the U.S. gearing up for a formal probe, NVIDIA’s revenue from AI could face substantial risk. Should the U.S. decide to close these trade loopholes, the impact might extend beyond NVIDIA—potentially shaking the foundations of the entire AI market landscape.
