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The Trump administration is reportedly investigating whether DeepSeek, a Chinese AI company, circumvented US export controls by acquiring Nvidia’s advanced computer chips through Singapore. This comes despite the US ban on the sale of powerful Nvidia chips to Chinese companies, raising concerns about potential regulatory gaps in the global technology supply chain.
Investigation into Bypassing Export Controls
According to Bloomberg, the White House and the FBI are looking into the possibility that DeepSeek sourced these chips through third parties in Singapore to bypass the restrictions. The US has strictly limited the sale of Nvidia’s most advanced chips to China, in a bid to curtail the nation’s ability to develop cutting-edge AI technology. DeepSeek, however, has claimed to have trained an AI model on par with US competitors for under $6 million, a figure that has sparked skepticism among industry leaders.
Key tech figures such as Elon Musk and Palmer Luckey have publicly questioned the feasibility of DeepSeek’s claims, particularly regarding its ability to do so without access to Nvidia’s high-performance chips. The investigation aims to determine if DeepSeek has been using indirect methods to obtain banned technology.
Concerns from US Lawmakers Over Nvidia Chips Illegal Export
In addition to the federal investigation, members of the US House’s select committee on China have urged the Trump administration to address potential loopholes in the regulatory framework that might allow China to gain access to restricted technology. In a letter to National Security Adviser Mike Waltz, lawmakers emphasized the need for stronger controls on shipments routed through third countries, which may represent a risk of diversion.
“Singapore represented 22% of Nvidia’s revenue in its most recent quarterly report, despite the company revealing that most of these shipments ultimately went to users outside of Singapore,” the letter read, highlighting concerns about potential circumvention.
DeepSeek’s Alleged Use of Nvidia Technology
DeepSeek’s claim of developing a highly efficient chatbot for under $6 million triggered a massive selloff in the tech sector, as investors feared that Nvidia’s chips were no longer as essential to AI development. Alexandr Wang, CEO of Scale AI, has suggested that DeepSeek may have secretly obtained advanced Nvidia chips, which it could not publicly acknowledge due to export controls.
Despite these allegations, neither the White House, the FBI, nor DeepSeek have responded to requests for comment on the matter.
Nvidia’s Position on Export Controls
Nvidia has expressed its commitment to ensuring compliance with export regulations. In a statement, the company emphasized that it insists its partners adhere to all applicable laws. “If we receive any information to the contrary, we act accordingly,” the statement said.
Previously, Nvidia had stated that DeepSeek had not violated any export controls. However, the controversy over the company’s access to Nvidia’s chips has not abated. Howard Lutnick, President Trump’s nominee for Commerce Secretary, has publicly stated that DeepSeek likely gained improper access to the chips. During his confirmation hearing, Lutnick asserted that DeepSeek had “bought tons” of Nvidia’s chips and found ways around the restrictions. He emphasized that the US should prevent China from using American technology to compete with US firms, stressing, “If they are going to compete with us, let them compete, but stop using our tools to compete with us.”
DeepSeek’s Use of Nvidia’s H800 Chips
In a recent research paper, DeepSeek revealed that it trained its V3 AI model using 2,048 of Nvidia’s H800 chips, a less powerful version created specifically for the Chinese market following the Biden administration’s blockage of more advanced models. The H800 chips were developed in response to the US’s refusal to sell its top-of-the-line chips to China, but in October 2023, the Biden administration also blocked the H800 chips, leading Nvidia to develop an even less powerful version called the H20.
Growing Skepticism Around DeepSeek’s Claims
Prominent figures in the tech industry, such as Palmer Luckey, CEO of AI defense firm Anduril, have expressed doubts about the veracity of DeepSeek’s claims. Luckey recently criticized DeepSeek for spreading what he described as “CCP propaganda” intended to undermine US efforts in AI development.
“You had a lot of useful idiots in US media mindlessly reporting that this was the case, and neither China nor the media nor DeepSeek has any incentive to correct the record,” Luckey said, adding that the controversy had caused a massive financial impact on US companies like Nvidia.
Also Read: Nvidia Ends Up Losing Massive $600 Billion After Chinese AI DeepSeek Create Ripples In Market
