U.S. Investigates Whether China’s DeepSeek Used Restricted AI Chips
Jan 30 (Reuters) – The U.S. Commerce Department is investigating whether Chinese AI company DeepSeek has been using advanced U.S. chips that are banned from being shipped to China, a source familiar with the matter revealed.
DeepSeek recently made waves in the tech world with the launch of its AI assistant, which the company claims operates with significantly lower data requirements and at a fraction of the cost of U.S. models. Within days, the app skyrocketed to the top of Apple’s App Store rankings, fueling concerns over the U.S.’s competitive edge in AI and contributing to a massive $1 trillion market sell-off in U.S. tech stocks.
AI Chip Smuggling Under Scrutiny
Existing U.S. regulations restrict the export of Nvidia’s (NVDA.O) most advanced AI processors to China. However, authorities have been tracking organized AI chip smuggling operations out of countries such as Malaysia, Singapore, and the United Arab Emirates, according to the source.
When asked for comment, both the U.S. Commerce Department and DeepSeek remained silent. Meanwhile, an Nvidia spokesperson acknowledged that many of the company’s customers operate business entities in Singapore, some of which are used to distribute products to the U.S. and other Western markets.
“We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, we act accordingly,” Nvidia stated.
Singapore Responds to Allegations
Singapore’s trade ministry referenced Nvidia’s remarks, stating that there is no reason to believe DeepSeek obtained restricted products from Singapore. However, the ministry did not confirm whether DeepSeek accessed U.S.-controlled Nvidia chips through intermediaries.
“We expect U.S. companies, like Nvidia, to comply with U.S. export controls and our domestic legislation,” the ministry said, adding that its customs and law enforcement agencies continue to collaborate with U.S. counterparts to enforce these regulations.
DeepSeek’s Alleged Chip Supply
DeepSeek has stated that it lawfully acquired Nvidia’s H800 chips in 2023. It is also reported to have access to Nvidia’s less powerful H20 chips, which remain eligible for shipment to China but have been considered for potential restrictions under both the Biden administration and the newly appointed Trump officials.
Anthropic CEO Dario Amodei weighed in on the controversy, saying earlier this week, “It appears that a substantial fraction of DeepSeek’s AI chip fleet consists of chips that haven’t been banned (but should be), chips that were shipped before they were banned, and some that seem very likely to have been smuggled.”
As the U.S. tightens its grip on AI chip exports, it is also considering extending restrictions to additional countries, signaling a broader effort to curb China’s access to cutting-edge AI technology.
