U.S. Investigates Singapore’s Role in Supplying NVIDIA AI Chips to China

The United States is currently delving into an investigation, trying to determine if DeepSeek managed to get their hands on NVIDIA’s AI chips by means of Asian middlemen, thereby exploiting potential trade loopholes.

In response to the controversy surrounding DeepSeek, the U.S. government appears more determined than ever to keep crucial domestic technology out of the hands of adversarial countries like China. Despite stringent export controls and restrictions, NVIDIA’s advanced AI chips, such as the H100, somehow continue to find their way to China and similar countries. According to Bloomberg, U.S. officials are now scrutinizing how these chips might have reached Chinese companies through nations like Singapore. If such a loophole is confirmed, it could lead to serious repercussions.

So, why focus on Singapore? Data shared by @KobeissiLetter reveal that NVIDIA’s sales to Singapore witnessed an unprecedented spike of up to 740% since DeepSeek’s establishment. Considering Singapore’s limited role in the AI race, this surge raises red flags about potential loophole exploitation. NVIDIA has openly acknowledged that the invoicing location and the actual end-user location can differ, indicating awareness of possible workarounds to bypass U.S. restrictions.

Moreover, it’s reported that China has been importing chips from Singapore in volumes surpassing those from the U.S. With Singapore hosting only 99 data centers, the scenario seems quite concerning. For some background, DeepSeek reportedly boasts over $1.6 billion in computational assets, including a staggering 10,000 China-specific H800 AI GPUs and another 10,000 high-end H100 AI chips from NVIDIA. Clearly, China isn’t lacking state-of-the-art AI GPUs, suggesting that, for now, U.S. preventive actions might be falling short.

Interestingly, Singapore isn’t the only potential player in this situation; there are claims that countries like the Philippines might also be facilitating chip supplies to China. With the U.S. gearing up for a formal investigation, NVIDIA’s 20% revenue from AI technology hangs in the balance. Should the U.S. decide to clamp down on this loophole, it could spell significant consequences not just for NVIDIA, but for the broader AI market.