As Chinese artificial intelligence model developer DeepSeek's AI model R1 showed comparable performance to the leading OpenAIO1, the United States began to worry that DeepSeek would pose a threat to its artificial intelligence leadership and launched an investigation into it. According to Bloomberg, the U.S. government is investigating whether DeepSeek used an intermediary in Singapore to bypass U.S. export restrictions to purchase NVIDIA AI GPUs banned from China.
Although DeepSeek has not disclosed the specific hardware used to train its R1 model. However, DeepSeek has revealed that it used a limited number of H800 GPUs (2048 GPUs) to train its V3 model using 671 billion parameters and 2.8 million GPU hours in just two months. In comparison, Meta trained its Llama3 model with 405 billion parameters in 54 days using a supercomputer with 16,384 H100 GPUs, an 11-fold increase in computing resources (30.8 million GPU hours). Apparently, DeepSeekR1 also consumes fewer resources than competing models. However, it is also possible that R1 is trained on a more powerful cluster than the one used by V3. It is believed that DeepSeek has 50,000 H100 GPU computing cards.
According to SemiAnalysis, a semiconductor research organization, DeepSeek has stockpiled 60,000 Nvidia GPU cards, including 10,000 A100, 10,000 H100, 10,000 "special edition" H800, and 30,000 "special edition" H20. The total cost of ownership (TCO) of computing capital expenditure exceeded 14 billion yuan, reaching 1.996 billion US dollars (approximately 14.345 billion yuan). DeepSeek's total server capital expenditure is approximately $1.629 billion, and the cost of operating such a cluster is as high as $944 million, so the overall cost may be as high as $2.573 billion. This assumption led to speculation that DeepSeek relied on non-compliant means to obtain a large amount of Nvidia AIGPU banned from China.
In recent years, the United States has continued to tighten restrictions on the export of advanced GPUs to China. In October 2022, the United States officially launched export restrictions on high-performance AI chips to China, and then further expanded the scope of restrictions in 2023. NVIDIA's A800/H800 specially supplied to China was also restricted. At the same time, the United States has also restricted the performance of GPUs that can be sold to China and multiple other countries without a U.S. Department of Commerce export license. However, Singapore was not previously among the restricted countries, leading to speculation that DeepSeek obtained Nvidia's high-end H100 GPU through regulatory loopholes.
According to NVIDIA's financial report, in the third fiscal quarter of fiscal year 2023 two years ago, Singapore accounted for only 9% of NVIDIA's total revenue. At that time, the United States was upgrading its export controls on AI chips to China. However, by the third fiscal quarter of fiscal year 2025, Singapore's share of Nvidia's total revenue has doubled and increased to 22%.
As a result, agencies including the White House and the FBI are investigating whether DeepSeek obtained restricted Nvidia AIGPUs through a third-party company in Singapore. Based on the report, representatives John Moolenaar and Raja Krishnamoorthi called for strict licensing measures unless Singapore tightens oversight of goods.
But so far, U.S. officials have not released any evidence confirming violations. Nvidia insists it complies with all legal requirements.
Nvidia clarified that most transactions with Singapore involve shipments destined elsewhere, not China. NVIDIA reports sales based on the "billed" location, but that doesn't always reflect where the product is ultimately used.
"Revenue associated with Singapore is not intended to be diverted to China," a statement from Nvidia read. "Our public filings report our customers' 'billing address' rather than their 'shipping address'. Many of our customers have business entities in Singapore and use these entities to sell products destined for the United States and the West. We insist that our partners comply with all applicable laws and act accordingly if we receive any information to the contrary."
It is worth mentioning that the threat theory "China is surpassing the United States in the field of AI" triggered by DeepSeek. On January 29, local time, Missouri Republican Senator Josh Hawley also proposed a bill aimed at protecting U.S. artificial intelligence (AI) development from China’s influence—the “Decoupling America’s Artificial Intelligence Capabilities Act of 2025” (Decoupling America’s Artificial Intelligence Capabilities Act of 2025) tificialIntelligenceCapabilitiesfromChinaAct), hoping to ban the import of artificial intelligence technology from or to China; prohibit U.S. companies from conducting AI research in China or cooperate with Chinese companies to carry out AI research; prohibit U.S. companies from investing in China's AI development.
According to the Associated Press, Greg Abbott, the governor of Texas and a Republican politician, signed an executive order on Friday local time, announcing that DeepSeek, a Chinese artificial intelligence service that has recently become popular in the United States, and the social platform Xiaohongshu will be blocked from electronic devices owned by the local government.