Deep-sea shock hits US... Nvidia export sanctions 'loophole' sought

Singapore Accounts for 20% of NVIDIA Sales
Suspected as an 'Intermediate Hub' Between the U.S. and China
Bloomberg Reports Investigation by FBI and Authorities

The U.S. Donald Trump administration has launched an inspection to ensure there are no loopholes in export restrictions on AI chip leader Nvidia's sales to China. The photo shows the logos of Nvidia and DeepSeek. (Photo by Reuters and Yonhap News)

The U.S. Donald Trump administration has begun cracking down to ensure there are no loopholes in export restrictions on AI chips to China, targeting NVIDIA, a leading AI chipmaker. It is reported that the investigation was launched with the possibility in mind that the Chinese AI startup DeepSeek, which recently caused a stir in the AI industry, may have illegally obtained NVIDIA semiconductor chips via a third party in Singapore.

On the 31st (local time), Bloomberg News cited multiple anonymous sources, reporting that U.S. authorities are investigating whether DeepSeek circumvented U.S. AI chip sales restrictions by purchasing NVIDIA semiconductors through a third party in Singapore. The key issue for White House and FBI officials is whether DeepSeek used intermediaries in Southeast Asian countries to acquire NVIDIA chips that the U.S. has banned from sale to China.

DeepSeek caused a global ripple in the AI industry when it launched the chatbot 'R1' in Hangzhou, China, in early January. Some of its features demonstrated performance comparable to similar AI tools from the U.S. Bloomberg also suggested that China might be ahead of expectations in the AI race. This is significant as the U.S., competing with China for AI supremacy, has maintained strict export control principles on semiconductor chips.

Although DeepSeek has not fully disclosed the semiconductors used in developing its AI models, the company’s researchers recently revealed in a paper that the 'V3' model released last month was trained using 2,048 NVIDIA H800 chips. The H800 is a product specially designed by NVIDIA for the Chinese market after the Biden administration blocked China’s access to high-performance semiconductors. However, after the U.S. government banned exports of several NVIDIA chips including the H800 in October 2023, NVIDIA developed the lower-spec H20 chip for sale in China.

Accordingly, it is interpreted that the U.S., competing with China for AI dominance, has begun cracking down to ensure there are no gaps in export restrictions on NVIDIA semiconductor chips. Among these, Singapore, which accounts for about 20% of NVIDIA’s total exports, has been identified as an intermediate hub on the route from the U.S. to China.

However, an NVIDIA spokesperson emphasized to Bloomberg that "sales occurring in Singapore do not necessarily mean rerouting shipments to China." They added, "Documents only indicate the 'bill to' location, not the 'ship to' location. Many customers ship products to the U.S. and Western markets through Singapore subsidiaries," countering the claims.

The Trump administration is reportedly considering additional sanctions on NVIDIA’s exports to China. On the 29th (local time), Bloomberg cited multiple anonymous sources saying that although discussions are still at a very early stage given the administration’s recent start, there is a possibility that export controls could be expanded to include NVIDIA’s H20 chip products.

Sources noted that during the previous Joe Biden administration, including the H20 in export controls was also discussed but never realized. They expect that since the Trump administration has just begun expanding personnel in relevant departments, it will take time before regulations are implemented.

Howard Lutnick, the nominee for Secretary of Commerce who will oversee the Trump administration’s industrial and trade policies, stated at a Senate confirmation hearing that he intends to impose "very strong" controls on semiconductors but refrained from providing specific details. The White House did not comment on Bloomberg’s request for remarks, while NVIDIA said it is "ready to cooperate with the U.S. administration while pursuing its own approach to AI."