US Probing Whether DeepSeek Got “Banned” Nvidia Chips Through S’pore

By
Noreen Shazreen
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The word “DeepSeek” has been circulating in conversations and making headlines after announcements revealed that its models are significantly cheaper than OpenAI’s models, such as ChatGPT.

DeepSeek is a startup based in Hangzhou, China, founded in 2023 by Liang Wenfeng, co-founder of the quantitative hedge fund High-Flyer.

While initial conversations primarily focused on the rivalry between the AI companies DeepSeek and OpenAI in the US and China, Singapore has now entered the picture.

You may wonder… but why?

There has been speculation from the US that DeepSeek outsourced its Nvidia processors through third-party distributors in Singapore.

US Probing Whether DeepSeek Obtained “Banned” Nvidia Chips Through Singapore

Bloomberg reported on Friday (31 January 2025) that authorities are investigating whether DeepSeek bypassed US restrictions on advanced chip sales to China and used Nvidia’s advanced technology when developing its R1 model.

They are investigating whether DeepSeek obtained the Nvidia chips through Singapore.

If you haven’t kept up with the news, DeepSeek has been making headlines over the past week after releasing a chatbot called R1. One of its models is reportedly 20 to 50 times cheaper than comparable OpenAI models.

Goldman Sachs estimates that OpenAI, Google, and other major players are collectively investing nearly $1 trillion into AI over the next few years. In contrast, DeepSeek has reportedly spent only $6 million to develop its app.

This has sparked discussions within the tech industry and raised questions from investors, some of whom believe that DeepSeek performs as well as comparable US-based AI tools. This has led to speculation that China may be further ahead in the AI race than previously believed.

The Core Issue: US Bans on Nvidia Chips to China

The issue stems from the US government’s ban on exporting Nvidia chips to China.

The US has imposed various export controls to restrict the sale of high-performance AI GPUs to China, aiming to prevent their use in military applications and mitigate national security concerns.

According to Business Times, China has also urged local companies to avoid Nvidia’s chips and instead purchase locally produced AI chips.

However, Bloomberg reported that officials in the White House and the Federal Bureau of Investigation are investigating whether DeepSeek used intermediaries in Singapore to purchase Nvidia chips that the US has banned from being sold to China. Sources who disclosed the information had requested to remain anonymous.

Howard Lutnick, President Donald Trump’s pick to lead the Commerce Department, claimed DeepSeek had acquired “tons of” Nvidia chips, and used it to contribute to the development of its AI models.

He reiterated that this practice must stop, stating that if Chinese AI companies want to compete with top US AI firms, let them compete, but they should stop using US tools to do so.

No Confirmation on DeepSeek’s AI Semiconductor Use

While DeepSeek has not explicitly identified which AI semiconductors it used to develop its models, its researchers mentioned in a paper that the V3 model, released last month, was trained on 2,048 of Nvidia’s H800 chips.

Nvidia designed the H800 specifically for the Chinese market after the Biden administration imposed restrictions on the sale of more advanced chips.

This has ignited debates on the effectiveness of US restrictions aimed at limiting China’s access to advanced technology.

These restrictions, which apply to various chips and the tools used to manufacture them, are intended to slow China’s semiconductor industry progress and prevent Beijing from gaining an AI advantage that could enhance its military capabilities.

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Noreen Shazreen
Email: [email protected]