Nvidia & MTI respond to claims of DeepSeek evading export ban through S'pore

Singapore has always upheld the rule of law, and acted decisively and firmly against individuals and companies that flout the rules, said the Ministry of Trade and Industry (MTI) in a Feb. 1 statement.

The ministry was responding to questions on whether Chinese AI DeepSeek used Singapore to evade an export ban on Nvidia's most advanced computer chips in order to develop its software.

The chips are banned for export from the U.S. into China.

Wait, what?

If you haven't been paying attention, DeepSeek is China's answer to ChatGPT — an AI chatbot that wiped out US$1 trillion (S$1.35 trillion) from tech stocks in a single day.

The reason? It purportedly spent less than US$6 million on its chatbot, significantly less than companies like OpenAI, which spent billions on their models.

The Hangzhou-based company also supposedly did not used Nvidia's most advanced chips.

But not everybody believes this. On Jan. 31, Bloomberg reported that U.S. government officials from the White House and Federal Bureau of Investigation (FBI) are trying to find out if DeepSeek used intermediaries in Singapore to purchase the chips.

Singapore, unlike China, is not subject to these export controls.

Congressmen John Moolenaar and Raja Krishnamoorthi also noted that Singapore accounts for 22 per cent of Nvidia's revenue, according to its recent quarterly statement.

Singapore revenue not indicative of diversion to China: Nvidia

In response, Nvidia clarified its revenue reporting, saying that their revenue figures are based on where their customers are billed and not where the products are shipped to.

Nvidia also "insists" its partners to comply with all applicable laws.

Here's their full statement to Investing.com:

"The revenue associated with Singapore does not indicate diversion to China. Our public filings report 'bill to' not 'ship to' locations of our customers. Many of our customers have business entities in Singapore and use those entities for products destined for the U.S. and the west. We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, act accordingly."

Chip shipments to Singapore were insignificant

In its statement, MTI said that Singapore is an international business hub.

"Major U.S. and European companies have significant operations here," the ministry explained.

Many of these customers use their business entities in Singapore to purchase chips for products destined for the U.S. and other Western countries, it added.

It also referenced Nvidia's regulatory filing, which said that most shipments associated with Singapore revenue were to locations other than Singapore, and shipments to Singapore were insignificant.

"Nvidia has also stated that there is no reason to believe that DeepSeek obtained any export-controlled products from Singapore," MTI said.

"We expect U.S. companies, like Nvidia, to comply with U.S. export controls and our domestic legislation.

Our customs and law enforcement agencies will continue to work closely with their U.S. counterparts."

Top image from Deepseek, Nvidia/YouTube and Canva