DeepSeek, the Chinese AI company that managed to wipe a trillion dollars from the market with its new chatbot, is being investigated by the US. The company is being probed to see if it bought and used Nvidia chips acquired from Singapore.
China and companies based in it are banned from importing powerful Nvidia chips that are aimed at driving artificial intelligence projects. This includes everything down to the consumer-grade card, the RTX 4090, and its recently released successor, the RTX 5090. While typically aimed at gaming PCs, these cards are powerful enough to power self-hosted AI applications.
Countries surrounding China, like Vietnam, have already been shown to have stockpiled Nvidia hardware during the first major ban. In a company document, Nvidia points out that 20% of its revenue comes from Singapore, but it also details that “most shipments” heading to the country were actually for “locations other than Singapore”.
Speaking to Bloomberg, an Nvidia spokesperson said that this is a “‘bill to’ not ‘ship to’ locations of our customers” and that customers buying Nvidia hardware typically have “business entities in Singapore and use those entities for products destined for the US and the West.”
The R1 model has been highly praised for its efficiency and ability to compete with the $200 a month o1 model from OpenAI, maker of ChatGPT. However, the US is concerned that the Chinese company will potentially call into question the Western world’s large spending on AI. Both Meta and Microsoft have earmarked $65 billion each for AI expenditure in 2025.
Much like the 4090 and 5090, which got cut-down versions (signified with a D) eligible to be shipped into China, Nvidia also created cut-down AI chips. It’s suspected that DeepSeek used H800 hardware to build R1, as indicated in its paper for the V3 model, which is also blocked from being imported.
Trump Commerce pick accuses DeepSeek of avoiding Nvidia China ban
The H800 was made to skirt around the ban and was eventually replaced by the H20, an even weaker chip after the H800 was barred. It’s expected that the Trump administration will prevent even the H20 from making it to China.
The administration already suspects that DeepSeek “bought tons of” Nvidia chips to build R1. In his confirmation hearing, Trump’s pick for Commerce Department head, Howard Lutnick, outright accused DeepSeek of breaking US law:
“Nvidia’s chips, which they bought tons of, and they found their ways around it, drive their DeepSeek model…
“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.”