The U.S. Department of Commerce is investigating Chinese AI startup DeepSeek over potential violations of export restrictions related to Nvidia chips. This inquiry centers on allegations that DeepSeek may have acquired up to 50,000 Nvidia H100 chips, which are prohibited from being exported to China due to U.S. sanctions aimed at curbing China’s access to advanced technology[1][3].
Key Developments
- Investigation Focus: The investigation is examining whether DeepSeek circumvented U.S. export controls by purchasing Nvidia semiconductors through intermediaries in Singapore. This scrutiny follows the recent launch of DeepSeek’s R1 chatbot, which has gained significant traction in the market and raised concerns about its capabilities, suggesting it may have leveraged advanced Western technology[2][5].
- Nvidia’s Response: Nvidia has stated that it insists its partners comply with all applicable laws and is monitoring the situation closely. The company previously developed the H800 chip specifically for the Chinese market, but this chip was banned in October 2023 as part of expanded U.S. restrictions[2][4].
- Market Impact: The release of DeepSeek’s R1 model led to a significant sell-off in tech stocks, with Nvidia losing approximately $600 billion in market capitalization following concerns about its competitive position against DeepSeek. This event has been described as a major disruption in the tech market, wiping out over $1 trillion in value globally[3][5].
Legislative Context
U.S. lawmakers, including representatives John Moolenaar and Raja Krishnamoorthi, are advocating for stricter export controls on Nvidia chips, particularly focusing on the H20 chip, which is currently not under strict restrictions. They are pushing for more rigorous oversight of semiconductor trade with Singapore, which has become a critical hub for chip shipments[1][2].
Conclusion
The investigation into DeepSeek underscores ongoing tensions between the U.S. and China over technological advancements and trade restrictions. As U.S. authorities continue to scrutinize potential loopholes in export controls, the implications for both companies and international relations in the tech sector could be significant moving forward[3][4].
Citations:
[1] https://www.medianama.com/2025/01/223-us-department-commerce-deepseek-chips-export/
[2] https://nationaltechnology.co.uk/US_Officials_Probe_Deepseeks_Singapore_Chip_Purchases.php
[3] https://www.benzinga.com/25/01/43390988/deepseek-and-nvidia-under-us-investigation-ai-market-shakeup-wipes-out-1-trillion-in-tech-value
[4] https://www.marketscreener.com/quote/stock/NVIDIA-CORPORATION-57355629/news/US-Probes-Possibility-of-Nvidia-AI-Chips-Bought-by-DeepSeek-in-Singapore-48927109/
[5] https://www.theonlinecitizen.com/2025/01/31/us-probes-chinese-ai-startup-deepseek-over-possible-nvidia-chip-purchases-via-singapore/
[6] https://cryptorank.io/news/feed/910b1-us-deepseeks-nvidia-chips-singapore
[7] https://www.bloomberg.com/news/newsletters/2025-01-31/us-probes-whether-deepseek-bypassed-chip-restrictions
[8] https://www.wsj.com/articles/nvidia-chip-flow-to-china-should-be-throttled-post-deepseek-u-s-lawmakers-say-09f265df
[9] https://www.bloomberg.com/news/newsletters/2025-01-31/us-probes-if-deepseek-evaded-export-rules-for-nvidia-chips
[10] https://www.youtube.com/watch?v=a9I7JCxKjPg
