US Probes if Chinese AI Firm DeepSeek Bypassed Chip Restrictions via Singapore

US officials are investigating whether DeepSeek, a Chinese artificial intelligence startup, acquired advanced Nvidia semiconductors through third parties in Singapore, potentially violating US restrictions on AI chip sales to China, Bloomberg reports.

The investigation stems from the recent release of DeepSeek's "R1" chatbot, which exhibits performance comparable to US counterparts, suggesting significant progress in China's AI development. The sophistication of R1 has prompted speculation that it may have been built using Western technology.

Officials from the White House and the Federal Bureau of Investigation (FBI) are scrutinizing whether DeepSeek utilized intermediaries in Singapore to procure Nvidia chips subject to US export bans, according to sources who spoke to Bloomberg on the condition of anonymity.

Nvidia, in a statement, emphasized its commitment to ensuring its partners comply with all applicable laws. However, the company has also issued a statement indicating its belief that DeepSeek did not violate US restrictions. An FBI spokesperson declined to comment, and a representative for the White House did not immediately respond to a request for comment. The Singapore embassy in Washington could not be reached for comment.

The investigation comes amidst heightened scrutiny of US efforts to curb China's access to advanced technology. Restrictions on various chips and manufacturing tools aim to slow China's semiconductor industry development and prevent the acquisition of AI technology that could bolster its military capabilities.

The release of DeepSeek's R1 chatbot, which mimics human reasoning, has sparked debate about the effectiveness of these US restrictions. Notably, DeepSeek researchers have acknowledged using Nvidia's H800 chips in the development of their previous model, V3. The H800 was specifically designed for the Chinese market after the Biden administration imposed restrictions on more powerful chip versions.

The US has expanded both the types of chips subject to export restrictions and the geographic scope of these restrictions, including more than 40 countries, in an effort to prevent intermediaries from supplying China. However, Singapore, a major hub for Nvidia's operations, remains a point of concern.

Despite Singapore accounting for 20% of Nvidia's revenue, the company maintains that most shipments associated with this revenue are destined for locations outside of Singapore, and that shipments directly to Singapore are insignificant. However, US Representatives John Moolenaar and Raja Krishnamoorthi, in a letter to National Security Advisor Mike Waltz, cited Nvidia's Singapore revenue as a potential indicator of diversion to China, advocating for strict licensing requirements for countries like Singapore.