U.S. Investigates Chinese AI Startup DeepSeek Over Alleged Bypass of Export Controls on Nvidia Chips

U.S. officials are investigating whether the Chinese AI startup DeepSeek has acquired advanced Nvidia semiconductors through third-party intermediaries in Singapore, potentially bypassing U.S. export controls on technology. These controls are aimed at restricting China’s access to high-performance chips, such as Nvidia’s H100 and A100 GPUs, which are essential for developing artificial intelligence. The investigation involves key players from the White House and the FBI, who are examining whether DeepSeek used these third-party channels to circumvent the restrictions.

The focus on DeepSeek comes after the company launched its AI chatbot, R1, which has been touted as capable of competing with Western AI tools while being developed at a much lower cost. This achievement has sparked concerns in the U.S. over China’s growing AI capabilities and whether U.S. export controls are effective in limiting China’s access to critical technologies. Despite these concerns, Nvidia has stated that its revenue from Singapore does not suggest any diversion of chips to China, though the company has avoided commenting directly on the ongoing investigation.

Taiwan, South Korea, France, Italy, Ireland Investigate DeepSeek’s AI and Data Privacy Practices

Taiwan’s Ministry of Digital Affairs has banned government departments from using DeepSeek’s AI service, citing security concerns due to the product’s Chinese origin. Taiwan has long been cautious about Chinese technology, given Beijing’s sovereignty claims and its ongoing military and political threats.

The ministry stated that the decision aims to prevent information security risks. It also emphasized that it will continue monitoring technological developments and adjust security policies as needed to ensure national safety.

Meanwhile, South Korea’s privacy watchdog announced plans to inquire about how DeepSeek handles user data. Authorities in France, Italy, Ireland, and other countries are also investigating DeepSeek’s data privacy practices.

This investigation highlights the increasing tensions between the U.S. and China over AI and semiconductor technologies. U.S. officials are keen to enforce stricter export controls to prevent unauthorized transfers of sensitive technology to China, a nation rapidly advancing in AI development. Meanwhile, Singapore plays a significant role in Nvidia’s operations, with roughly 20% of the company’s sales coming from the region. However, this figure is based on the “bill to” location, not the “ship to” location, which complicates the tracking of where the chips actually end up.

The case underscores the complexities of international trade regulations, especially as both countries vie for dominance in AI technology. If the investigation finds that DeepSeek successfully bypassed the U.S. export restrictions, it could escalate tensions between the U.S. and China. This might lead to more stringent export controls or even sanctions, further complicating global tech supply chains and intensifying the geopolitical battle for control over cutting-edge technologies.

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