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

The ongoing inquiry by the US into DeepSeek’s potential acquisition of NVIDIA’s AI chips through intermediaries in Asia is shedding light on possible trade loopholes.

DeepSeek’s significant AI milestone is compelling the US to tighten export regulations, potentially scrutinizing these trade vulnerabilities more intensely. Following the DeepSeek debacle, there’s a renewed determination within the US to prevent their advanced technology from reaching adversaries like China. Despite stringent export restrictions, high-grade NVIDIA AI chips such as the H100s are finding their way into China and other countries. Bloomberg highlights that US officials are exploring whether these chips have been channeled to Chinese enterprises via countries such as Singapore, which could have dire implications if these loopholes are indeed confirmed.

So, why is Singapore under the microscope? According to the Twitter account @KobeissiLetter, NVIDIA’s sales to Singapore have spiked by an astounding 740% since DeepSeek hit the scene. Given that Singapore isn’t a major player in the AI space, this raises strong suspicions about possible loopholes. NVIDIA themselves acknowledge that billing addresses may differ from the final destination, which hints at awareness of potential circumventions of US restrictions.

Additionally, it’s reported that China has been importing chips from Singapore in quantities exceeding those of the US, which is particularly concerning given Singapore’s relatively modest number of data centers—just 99 in total. For those not in the loop, DeepSeek is reputed to possess over $1.6 billion in computational assets, including about 10,000 of NVIDIA’s “China-specific” H800 AI GPUs and another 10,000 of the more advanced H100 AI chips. This indicates that China has no shortage of advanced AI hardware, suggesting current US efforts may be less effective than anticipated.

Interestingly, Singapore isn’t the sole nation under suspicion; reports suggest countries like the Philippines might also be implicated in diverting chips to China. With the US poised to launch a formal investigation, NVIDIA’s lucrative 20% AI revenue stream could be at risk. If the US opts to close these trade loopholes, it could have far-reaching impacts, not only on NVIDIA but across the broader AI market landscape.