The US Commerce Department is currently investigating whether DeepSeek—a Chinese AI company that has taken the tech world by storm—has been using American-made chips that are banned from export to China. This inquiry comes as DeepSeek’s AI model demonstrates groundbreaking performance, raising concerns about the global AI race.
DeepSeek’s Meteoric Rise
Just last week, DeepSeek launched a free AI assistant that, according to the company, operates with significantly less data and at a fraction of the cost of US-developed models. The impact was immediate. Within days, the app became the most downloaded application on Apple’s App Store, fueling fears that China is rapidly catching up—or even surpassing—the United States in artificial intelligence.
The news sent shockwaves through the market, triggering a tech stock selloff that erased an estimated US$1 trillion (S$1.35 trillion) in value from US technology firms.
Singapore’s Role in AI Chip Supply
Current US restrictions on Nvidia’s AI processors are designed to prevent the company’s most advanced chips from reaching China. However, reports suggest that organized smuggling networks are facilitating the flow of these high-performance chips into China from various countries, with Singapore playing a notable role as a key transit point. The city-state’s strategic location and status as a global technology hub make it a focal point for semiconductor trade, both legal and illicit.
The US government is now looking into whether DeepSeek may have acquired these restricted AI chips through unofficial channels, possibly from sources linked to Singapore. If confirmed, it could further escalate tensions between Washington and Beijing over AI and semiconductor technology.
Silence from Key Players
Both DeepSeek and the US Commerce Department have yet to comment on the investigation. Meanwhile, Nvidia, which has a significant market presence in Singapore—accounting for roughly 20% of its total sales—denies any involvement in unauthorized chip shipments to China. A spokesperson for the company told Investing.com on November 29 that its revenue distribution does not indicate any illegal diversions.
The Bigger Picture
This investigation highlights the ongoing battle for AI supremacy and the lengths to which nations and companies will go to maintain a competitive edge. As AI becomes increasingly critical in shaping the future of technology, geopolitical tensions around semiconductor supply chains are only expected to intensify.
For now, all eyes remain on the US government’s probe into DeepSeek, with a particular focus on Singapore’s role in the global chip supply chain. The outcome could have far-reaching consequences for both the AI industry and international trade relations.
