On January 31, 2025, the Trump administration initiated an investigation into DeepSeek, a technology company suspected of acquiring Nvidia's advanced computer chips through Singapore, despite existing US export controls prohibiting such sales to firms based in China.
Key figures in the tech industry, including Elon Musk and Palmer Luckey, have expressed skepticism regarding DeepSeek's assertion that it developed an AI model comparable to US competitors for under $6 million without utilizing Nvidia's most advanced chips.
Reports indicate that officials from the White House and the FBI are examining whether DeepSeek circumvented export restrictions by sourcing banned chips from third parties in Singapore. This inquiry follows a letter from prominent lawmakers in the House's select committee on China, urging the administration to strengthen controls on shipments through third countries that may pose a risk of diversion.
DeepSeek's claims about its cost-effective AI development have triggered a significant market reaction, leading to a $1 trillion selloff as investors reevaluated the necessity of Nvidia chips in the AI sector. Scale AI CEO Alexandr Wang suggested that DeepSeek possesses advanced Nvidia chips that it cannot publicly acknowledge due to export regulations.
Nvidia has stated its commitment to ensuring compliance with applicable laws and indicated that it would take action if any violations are reported. Despite earlier assertions that DeepSeek had not breached export controls, concerns remain regarding the company's access to Nvidia's technology.
During a recent confirmation hearing, Howard Lutnick, President Trump's nominee for Commerce Secretary, claimed that DeepSeek likely gained improper access to Nvidia chips, emphasizing the need to prevent foreign competitors from utilizing US technology to enhance their capabilities.
In response to increasing scrutiny, DeepSeek has published a research paper stating that it trained its V3 model using 2,048 of Nvidia's H800 chips, which were specifically designed for sale to Chinese firms following a previous ban on more advanced models. The Biden administration's recent decision to block the sale of the H800 has prompted Nvidia to develop a less powerful version known as the H20.
As the investigation unfolds, industry leaders at Meta and Microsoft have reaffirmed their commitment to investing heavily in AI infrastructure and computer chips over the coming years.