Singapore, a major trading hub, is responsible for 22% of Nvidia’s total revenue. Recently, there have been concerns that the Chinese AI startup Deepseek might have obtained Nvidia’s powerful chips, which are not approved for export to China, through Singapore. The US authorities are investigating this possibility.
The Ministry of Trade and Industry (MTI) of Singapore has made it clear that they expect US companies to comply with both US export controls and Singapore’s local laws. They have distanced themselves from the suspicion that Singaporean authorities might have facilitated the delivery of powerful AI chips to China. However, it is possible that Deepseek could have obtained unauthorized AI chips through third parties using Singapore as a trading hub.
The MTI has neither confirmed nor denied this possibility. Nvidia has stated that the AI chips provided to Deepseek were fully compliant with export regulations. The MTI reiterated that they expect US companies like Nvidia to follow export controls and local laws. Singapore’s customs and law enforcement agencies continue to work closely with their US counterparts to enforce these regulations.
The suspicion arises from two main considerations. First, experts are puzzled about how Deepseek managed to train and operate its powerful R1 AI model using Nvidia’s export-regulated chips. Second, Nvidia’s financial results for the third quarter of 2024 revealed that Singapore accounts for nearly 22% of its revenue. However, Nvidia clarified that most shipments associated with Singapore revenues were ultimately delivered to locations outside Singapore, and shipments to Singapore were insignificant.
There is no evidence to suggest that Deepseek obtained export-controlled products through Singapore. Nvidia has emphasized that many US and European companies have significant operations in Singapore and use these business units to purchase chips for products intended for the US and other Western countries.
Singapore is an international business hub, and many large companies have established significant operations there. Nvidia’s statement highlighted that these companies often use their Singaporean units to acquire chips for products destined for the US and other Western markets.
In summary, while there are concerns about the potential misuse of Singapore as a trading hub for unauthorized chip exports, both Nvidia and the MTI have stated their commitment to compliance with international regulations. Singapore remains a key player in the global technology supply chain, and its authorities continue to uphold the rule of law.
