U.S. authorities are intensifying their investigation concerning whether Chinese artificial intelligence (AI) startup DeepSeek has managed to access advanced semiconductors from Nvidia by using Singaporean intermediaries to circumvent U.S. export controls. Reports indicate this inquiry is focused on claims alleging DeepSeek, which presents itself as China's answer to ChatGPT, purchased sophisticated Nvidia chips banned for export to China.
The Department of Justice and FBI are leading the probe, along with officials from the White House, noted Bloomberg. These inquiries gained prominence after DeepSeek announced the launch of the R1 chatbot, positional to compete with other AI systems, raising eyebrows about its potential reliance on Western technology.
The investigation revolves around allegations of using Singapore as a backdoor to obtain Nvidia's powerful semiconductors, particularly the H800 chips. These chips were officially banned for sale to China back in October 2023, due to fears they could bolster China's tech capabilities. U.S. authorities are now assessing if DeepSeek's advancements were backed by these potentially illicit acquisitions.
DeepSeek's recent success—a massive leap in the AI sector—raised questions about how it achieved breakthroughs without the extensive funding compared to its competitors like OpenAI. During the Senate confirmation hearings, Howard Lutnick, President Trump’s nominee for the Commerce Department, spoke pointedly about this concern, stating, "Nvidia’s chips, which they bought tons of, and they found their ways around it, drive their DeepSeek model." His comments spotlight the growing unease over international compliance with semiconductor trade restrictions.
According to Nvidia, which generates approximately 20% of its revenue from sales transactions attributed to Singapore, recent findings were clarified. The company emphasized most shipments linked to Singaporean revenue were classified as going to other regions, describing shipments to Singapore itself as insignificant. "We insist our partners comply with all applicable laws, and if we receive any information to the contrary, we will act accordingly," stated Nvidia's representative.
The Singaporean Ministry of Trade and Industry (MTI) expressed strong support for the U.S. enforcement of export controls. On February 1, 2025, the MTI stated constructive measures against companies attempting to flout regulations. According to the ministry, Singapore actively fosters adherence to both U.S. regulations and its domestic legislation. They affirmed, "Our customs and law enforcement agencies will continue to work closely with their U.S. counterparts."
DeepSeek, established as part of China’s significant tech progression, is reckoned to have developed AI models with astonishing efficiency, reportedly spending less than $6 million—a fraction compared to billions spent by competitors. While claiming minimal use of advanced chips, skepticism persists about DeepSeek's sourcing and development methodologies.
The existence of manufacturing channels outside stringent regulatory control could spell challenges for U.S. policy makers and companies like Nvidia, who need to guard against unintentional contributions to Chinese tech prowess. U.S. lawmakers are closely monitoring these developments to fortify the integrity of export controls worldwide.
DeepSeek's case highlights vulnerabilities within the international trade fabric and the need for rigorous scrutiny of technological transactions across borders. The allegations themselves do not simply question the integrity of one AI startup but also reflect broader anxieties about U.S.-China relations and the balance of power within the fast-evolving tech sector.
Conclusively, as the investigation continues, both Nvidia and the authorities face pivotal turning points steering technology development rules and trade practices—proof of how interconnected the global tech economy truly is, and why compliance with trade laws remains fundamentally imperative for all parties involved.