US Probes DeepSeek for Possible Use of Smuggled AI Chips

News Desk 

Islamabad: The United States (US) Commerce Department has launched an investigation into whether China’s AI firm DeepSeek acquired and used American AI chips that were restricted from export to China, a source familiar with the matter revealed.

DeepSeek recently gained attention after unveiling an AI assistant capable of operating with reduced data and significantly lower costs than US models. The app quickly became the most downloaded on Apple’s App Store, fueling concerns over America’s dominance in artificial intelligence.

The development triggered a massive sell-off in US technology stocks, wiping out nearly $1 trillion in market value.

The US had previously imposed restrictions to prevent Nvidia’s most advanced AI processors from reaching China. However, according to the source, AI chip smuggling into China has been traced through multiple countries, including Malaysia, Singapore, and the United Arab Emirates.

Both the Commerce Department and DeepSeek have yet to respond to requests for comment.

A spokesperson for Nvidia acknowledged that many of its customers operated business entities in Singapore for shipments destined for US and Western markets. “We require our partners to comply with all applicable laws and take action if we receive any information to the contrary,” the spokesperson stated.

Singapore’s trade ministry, citing Nvidia’s remarks, asserted there was no indication that DeepSeek had obtained export-controlled products from Singapore. While it refrained from confirming whether the Chinese firm accessed restricted Nvidia chips via intermediaries, the ministry emphasized that Singapore upholds the rule of law.

“We expect US companies like Nvidia to comply with US export controls and our domestic legislation,” the ministry stated. “Our customs and law enforcement agencies will continue working closely with their US counterparts.”

DeepSeek maintained that it lawfully purchased Nvidia’s H800 chips in 2023. However, Reuters could not determine whether the company had acquired other controlled chips prohibited from export to China. Reports also suggested that DeepSeek possessed Nvidia’s H20 chips, which are still legally available for shipment to China.

The Biden administration had considered restricting the sale of H20 chips, while officials in the Trump administration have now begun discussions on the matter.

Anthropic CEO Dario Amodei remarked earlier this week, “A significant portion of DeepSeek’s AI chip fleet consists of chips that haven’t been banned (but should be), chips shipped before restrictions were imposed, and some that likely entered through smuggling.”

The US has already enforced strict export controls on AI chips to China and is preparing to extend these restrictions to additional countries.