(Zero Hedge)—Chinese startup DeepSeek’s latest AI models, V3 and R1, were reportedly trained on just 2,048 Nvidia H800 chips—GPUs that were blacklisted by the US government in 2023 for sale to Chinese firms. Federal investigators are now combing through trade data to determine how DeepSeek acquired the restricted chips.
Bloomberg spoke with sources close to the US probe focusing on “third parties” in Singapore that procured the H800 chips and sold them to DeepSeek—a move we’ve seen before to circumvent US trade restrictions (read here).
Here are more details about the probe:
Officials in the White House and Federal Bureau of Investigation are also trying to determine whether DeepSeek used intermediaries in the Southeast Asian nation to purchase Nvidia chips that the US has banned from sale to China, said the people, who requested anonymity to relay private conversations.
At a confirmation hearing on Wednesday, Howard Lutnick, President Donald Trump’s nominee to lead the Commerce Department, said, “Nvidia’s chips, which they bought tons of, and they found their ways around it, drive their DeepSeek model,” adding, “It’s got to end. If they are going to compete with us, let them compete, but stop using our tools to compete with us. So I’m going to be very strong on that.”
Bloomberg has reported that Trump administration officials are focused on whether H20 chips should be restricted as well. This trend of restricting China from advanced AI chips designed and produced by US or Western-aligned companies ramped up in the last four years.
According to regulatory filings, Singapore accounts for 20% of Nvidia’s revenue. The filings also show that “most shipments associated with Singapore revenue were to locations other than Singapore, and shipments to Singapore were insignificant.”
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Biden officials recently expanded rules that large shipments of high-tech chips to Singapore would require a license. However, shipments under 1,700 chips only require notification.
Those sources close to the federal investigation did not provide Bloomberg with any other details about the Singapore buyers or if those entities were just shell companies.
A report from late 2023 via Bloomberg found that a shell company in India was buying high-tech US chips, then turning around and selling them to Russia to circumnavigate sanctions.
