US Investigates Potential Illegal Use of AI Chips by Chinese Firm DeepSeek

The U.S. Commerce Department is currently investigating the Chinese artificial intelligence company DeepSeek for allegations of using restricted American microchips in their latest AI models. This inquiry has sent shockwaves through the tech industry, potentially challenging America's supremacy in the AI sector.

DeepSeek recently made headlines with the launch of an AI-powered assistant that promised high efficiency with significantly lower data consumption and costs compared to American models. The application swiftly topped the charts on Apple's App Store, propelling concerns about the United States losing its edge in the global AI race. This event triggered a massive downturn in U.S. tech stocks, erasing approximately $1 trillion in market value.

The focus of the investigation centers around Nvidia AI processors, which are under stringent export controls intended to prevent their most advanced chips from being accessed by Chinese firms due to national security concerns. Reports have surfaced of organized smuggling rings routing these chips through countries such as Malaysia, Singapore, and the UAE to China.

A spokesperson from Nvidia has stated that many of their customers, including those with business units in Singapore, are expected to adhere strictly to all applicable laws. The company stressed its commitment to compliance and readiness to act if any breaches are discovered.

Singapore's Ministry of Trade, in alignment with Nvidia's statements, refuted claims of DeepSeek acquiring export-controlled products from within its jurisdiction. However, they did not provide a direct confirmation on whether the chips reached DeepSeek through intermediaries based in Singapore. The Ministry emphasized Singapore's dedication to the rule of law and its proactive stance against any rule violations.

Further complicating matters, DeepSeek has admitted to using Nvidia’s H800 chips, which were available for legal purchase as of 2023. It remains unclear, however, if other controlled chips have also been utilized unlawfully. Nvidia's H20s chips, less powerful yet still significant, were also mentioned by DeepSeek as part of their hardware suite. The U.S. had previously considered placing these under export controls—a topic currently under discussion by officials from the newly arrived Trump administration.

Dario Amodei, CEO of competing AI firm Anthropic, highlighted in a recent statement that a significant portion of DeepSeek’s chip arsenal possibly includes models that should be under restrictions, were shipped before bans, or were likely smuggled.

This ongoing probe is part of a broader U.S. strategy to restrict exports of AI technology to China. This includes setting limits on shipments to several countries, highlighting the growing tensions and the high stakes in the global tech landscape, where AI capabilities play a pivotal role.