Artificial Intelligence & Machine Learning
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Cyberwarfare / Nation-State Attacks
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Fraud Management & Cybercrime
US to Investigate Whether DeepSeek Bypassed Export Controls to Obtain Nvidia Chips
Singapore vowed to investigate allegations that Chinese artificial intelligence company DeepSeek flouted U.S. export controls to obtain high-performance Nvidia chips to power its flagship R1 reasoning application through intermediaries based in the island nation.
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The Singaporean Ministry of Trade and Industry, or MTI, on Saturday stopped short of denying the allegations and promised to work closely with U.S. agencies to ensure its territory is not used to flout U.S. export controls. These include U.S. restrictions on the export of high-performance semiconductor chips that can power artificial intelligence applications that China could use for military purposes.
The ministry relied on Nvidia’s earlier statement in which the chipmaker said there is no reason to believe that DeepSeek obtained any export-controlled products from Singapore, even though a vast majority of its products shipped to Singapore are used by companies based in the U.S. and other Western countries.
“Singapore is an international business hub. Major U.S. and European companies have significant operations here,” the ministry said. “Nvidia has explained that many of these customers use their business entities in Singapore to purchase chips for products destined for the U.S. and other Western countries.”
MTI’s clarification came in response to a Bloomberg report that said U.S. agencies are investigating whether the Chinese AI company used intermediaries based in Singapore to purchase advanced Nvidia chips.
“We expect U.S. companies, including Nvidia, to comply with U.S. export controls and our domestic legislation. Our customs and law enforcement agencies will continue to work closely with their U.S. counterparts,” the ministry said.
Nvidia said in its financial report for the quarter ending Oct. 27 that its exports to Singapore in the preceding nine-month period exceeded $17 billion, up from just $7.6 billion in the previous year, and accounted for 22 percent of worldwide revenues, but very little of the hardware was used in Singapore.
“The end customer and shipping location may be different from our customer’s billing location. For example, most shipments associated with Singapore revenue were to locations other than Singapore and shipments to Singapore were insignificant,” the company said.
In January, the U.S. Department of Commerce’s Bureau of Industry and Security placed several organizations in China and Singapore on the Entity List for violating U.S. export controls on advanced semiconductors to “restrict the PRC’s ability to obtain certain high-end chips critical for military advantage.”
The Department of Commerce said advanced AI capabilities facilitated by advanced computing chips could help China improve the speed and accuracy of military decision making, planning and logistics and enable cognitive electronic warfare, radar, signals intelligence, jamming and facial recognition surveillance systems.
In December, the U.S. also imposed export controls on 24 types of semiconductor manufacturing equipment and three types of software tools to impede China’s ability to produce advanced-node semiconductors that can be used in advanced weapon systems used to power AI applications for military use. In response, China banned exports of dual-use items that can be used for military purposes, including gallium, germanium, antimony and superhard materials.
The United States first imposed controls on the export of advanced computing chips to China on Oct. 7, 2022. The list of designated chips included Nvidia’s most powerful H100 tensor core GPU that could solve trillion-parameter language models. To maintain the volume of its China exports, Nvidia developed the H800 GPU which eventually facilitated the development of DeepSeek AI. The U.S. commerce department restricted sales of H800 chips to China in October 2023, paving the way for Nvidia’s H20 chip.
According to a Reuters report, President Donald Trump is considering the possibility of preventing Nvidia from selling its latest H20 chip to Chinese companies and that official conversations are in very early stages. Trump met with Nvidia chief executive officer Jensen Huang on Friday, but discussions centered around shifting semiconductor manufacturing to the U.S. than restrictions on Nvidia’s exports to China.