US suspicion may be right, Singapore may have an ‘Nvidia-DeepSeek problem’

US suspicion may be right, Singapore may have an 'Nvidia-DeepSeek problem'

The Singapore Police Force has arrested three men of fraud. Reports suggests that the arrests have been made in connection with the alleged illegal re-export of Nvidia GPUs to DeepSeek, a Chinese AI company, skirting US trade sanctions, according to ChannelNewsAsia. In a joint operation, police and customs officials swept through 22 sites, detained nine suspects, and confiscated electronic devices and paperwork, as reported by Reuters.
In 2024, Singapore unexpectedly surged to become Nvidia’s second-biggest revenue hub, prompting speculation that the city-state was a conduit for smuggling GPUs into China. Nvidia refuted the claims, insisting that its billing locations don’t reflect where the GPUs ultimately end up and noting that Singapore accounted for under 2% of its fiscal 2025 shipments. The U.S. Commerce Department’s scrutiny intensified after DeepSeek unveiled its open-source AI model and chatbot, raising questions about whether it accessed banned chips. Reuters reported last year that entities like the Chinese military, state AI labs, and universities had acquired restricted U.S. semiconductors despite export controls.
According to a report in ChannelnewsAsia, evidence suggests that a smuggling network exists, with Singapore-based intermediaries allegedly funneling high-performance Nvidia GPUs—used for AI and high-performance computing—into China, flouting US export rules. While the arrests highlight the role of local groups in moving these restricted chips, authorities are still piecing together the scale of the operation. DeepSeek, for instance, relies on tens of thousands of Nvidia Hopper GPUs (models like H100, H20, and H800) to build its large-language models, though smaller research outfits might use just dozens or hundreds.
Singapore’s government clarified last week that it isn’t obligated to uphold unilateral foreign export limits but expects companies within its jurisdiction to follow them when relevant. Officials stressed that exploiting Singapore’s trade system to dodge global restrictions won’t be tolerated.
The Singapore arrests come hot on the heels of a US announcement, made a month ago, that it was investigating possible collaboration between DeepSeek and Singaporean third parties to obtain Nvidia chips. “We use Singapore as a hub for centralized invoicing, but our products are typically shipped elsewhere,” Nvidia stated. Nevertheless, the U.S. Commerce Department launched a probe into whether DeepSeek had obtained restricted U.S.-made GPUs to power its AI development.

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