International
US probes Chinese AI startup DeepSeek over possible Nvidia chip purchases via Singapore
US officials are investigating whether Chinese AI firm DeepSeek used third-party intermediaries in Singapore to obtain banned Nvidia chips. The probe highlights concerns about China’s access to advanced AI hardware and its potential implications on global technological competition and export restrictions.

A significant tech stock selloff on Monday, 27 January, has prompted intensified scrutiny of Chinese AI startup DeepSeek. The company’s unveiling of its R1 model, a low-cost, high-performance AI tool, raised concerns that it may have acquired restricted Nvidia chips through intermediaries in Singapore, triggering a US federal investigation.
US officials, including the White House and the FBI, are investigating whether DeepSeek bypassed US export controls to access Nvidia’s H800 chips, according to sources familiar with the inquiry, Bloomberg reported on Friday.
The H800, a modified version of Nvidia’s high-performance H100, was created to comply with earlier restrictions on exports to China but was banned in October 2023 under expanded US controls.
Tech market disruption sparks probe
The launch of DeepSeek’s R1 model, capable of competing with AI tools from Silicon Valley at a fraction of the cost, caused a sharp decline in technology markets.
Nvidia’s stock plummeted by 17%, erasing $593 billion from its market capitalisation. The Nasdaq Composite fell 3.1%, and over US$1 trillion in market value was wiped out globally. Other chipmakers, including Broadcom and Super Micro Computer, also suffered significant losses.
Marc Andreessen, a prominent Silicon Valley investor, described DeepSeek’s breakthrough as a “Sputnik moment” for artificial intelligence.
DeepSeek’s R1 has rapidly gained traction, overtaking ChatGPT in App Store downloads. This success raised questions among industry experts about whether the company had obtained unauthorised access to high-performance Western semiconductors.
US export restrictions and enforcement concerns
US authorities are investigating whether Singapore served as an intermediary for restricted Nvidia chip shipments to DeepSeek, raising broader concerns about gaps in enforcing export restrictions.
Although Singapore accounts for approximately 20% of Nvidia’s reported revenue, filings indicate that most shipments listed under Singapore were destined for other regions. Nvidia denies any evidence of diversion but stated it will act on any discovered violations.
Howard Lutnick, President Donald Trump’s nominee for Commerce Secretary, addressed the issue during his confirmation hearing.
“DeepSeek’s model was driven by Nvidia chips they weren’t supposed to have. They found ways around it, and it’s got to end,” Lutnick said.
He called for stricter export controls to prevent US technology from indirectly supporting China’s AI development.
This investigation is part of a broader US strategy to contain China’s AI progress by restricting access to critical semiconductors. In 2023, the Biden administration expanded export controls to over 40 countries, though comprehensive restrictions did not initially apply to Singapore, creating a potential enforcement loophole.
DeepSeek’s success, particularly its R1 chatbot launch, has reignited debate over whether these restrictions are effectively slowing China’s AI ambitions.
Despite US efforts, R1’s capabilities demonstrate China’s technological momentum, challenging US dominance in key AI fields.
The case is not isolated. Recent incidents highlight how restricted technology has reached Chinese companies through intermediaries.
For example, Taiwan Semiconductor Manufacturing Company (TSMC) recently ended its partnership with PowerAIR, a Singapore-based firm, after identifying a potential breach of US export controls involving Huawei Technologies.
Evidence of GPU flows despite US restrictions
Recent evidence suggests that restricted Nvidia GPUs, including the H100 and H200 models, continue to enter China despite US sanctions.
Su Di, co-founder of the Beijing-based startup incubator Kun Lun Nest, publicly showcased shipments of Nvidia’s H100 and H200 chips on Chinese social media.
In a video posted in November 2024, Su highlighted the chips’ importance in driving China’s AI boom, despite efforts by the US government to block their sale to Chinese entities.
In the video, Su acknowledged that acquiring the chips violated US export laws but claimed that large shipments had been arriving regularly. He noted that his contacts had been operating on a “large scale for two years” and had successfully bypassed sanctions.
“Trump would likely be furious about this,” Su remarked, referencing the ongoing political and trade tensions between the US and China.
Su defended the practice, arguing that China’s technological development required access to the best hardware available. He described the US ban as a strategy to suppress China’s competitiveness but said it had inadvertently pushed China to accelerate its domestic chip manufacturing capabilities.
Singapore’s role and US pressure for stricter measures
Singapore’s strategic role in global semiconductor supply chains has drawn increased scrutiny from US policymakers. The Biden administration expanded its export controls in 2023 to over 40 countries but has not applied the same stringent licensing requirements to Singapore.
According to Nvidia’s filings, Singapore accounts for about 20% of the company’s revenue, although shipments directly to the country are minimal.
In a letter to National Security Advisor Mike Waltz, US lawmakers John Moolenaar and Raja Krishnamoorthi pointed to Singapore’s involvement as a potential weak link in enforcing US export controls.
They urged stricter licensing requirements on shipments passing through Singapore, warning that intermediaries could be facilitating chip transfers to China.

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