US officials are reportedly investigating whether Chinese artificial intelligence startup DeepSeek circumvented export restrictions by acquiring advanced NVIDIA semiconductors through third parties in Singapore.

According to sources cited by Reuters, the probe follows DeepSeek's release of its R1 chatbot, which has demonstrated capabilities rivalling US-developed AI tools, raising questions about China's advancing AI technology. The investigation involves officials from both the White House and Federal Bureau of Investigation.

Howard Lutnick, nominated to head the US Commerce Department, expressed concern about the situation during his confirmation hearing, stating: "If they are going to compete with us, let them compete, but stop using our tools to compete with us."

DeepSeek's researchers have acknowledged using 2,048 of NVIDIA's H800 chips to train their V3 model, released last month. NVIDIA developed the H800 for the Chinese market after initial US restrictions, but these chips were subsequently banned in October 2023, leading NVIDIA to create the less powerful H20 for China.

Singapore has emerged as a key focus of the investigation, accounting for approximately 20 per cent of NVIDIA's revenue. However, NVIDIA maintains that most shipments associated with Singapore are destined for other locations. An NVIDIA spokesperson stated: "We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, act accordingly."

The Biden administration had recently expanded its export controls to include more than 40 nations, requiring licenses for large chip shipments to Singapore, while smaller shipments require notification. US Representatives John Moolenaar and Raja Krishnamoorthi have called for stricter oversight of Singapore's role in semiconductor trade.

The investigation highlights ongoing tensions over AI technology's strategic importance and the effectiveness of US export restrictions aimed at limiting China's access to advanced AI capabilities. DeepSeek has not commented on the matter.

---