The U.S., with its God complex and a dogmatic perception regarding other nations, is quite a paradoxical situation. A source with knowledge of the situation revealed that the U.S Department of Commerce is investigating whether DeepSeek, the Chinese firm responsible for the AI model’s success in China, has been using U.S. chips that are prohibited for shipment to China. When your AI model becomes the talk of the tech world and wipes $1 trillion off U.S stocks, someone with a God complex can have suspicions that it might have a little ‘forbidden fruit’ involved.
U.S Dominance in AI:
Last week, China’s DeepSeek unveiled a free assistant that uses less data and is priced below other U.S models. In just a few days, it became the most downloaded app in Apple’s App Store and raised concerns about the United States’ dominance in AI, leading to a major drop in U.S tech stocks, costing almost $1 trillion in market value. The current exports of the A100 and H100 models are restricted from China, as Nvidia’s advanced artificial intelligence chips are designed to prevent them from competing with other nations regarding AI technology for market share.
Yet, as per the source, organizations that are smuggling AI chips to China have been observed in countries like Malaysia, Singapore, and the United Arab Emirates. DeepSeek and the Commerce Department failed to respond immediately when questioned on this matter.
A spokesperson for Nvidia explained that many of Nvidia’s clients have established businesses in Singapore and overseas, while others may also be involved in shipping their products to the U.S. and Western countries. Nvidia said, “We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, act accordingly.” However, previous reports by DeepSeek suggest that it used Nvidia’s H800 chips, which were available to purchase legally before the latest U.S. restrictions were enacted in 2023.
AI Chips Supply Chain at Risk:
DeepSeek really went from a promising AI startup to a suspect involved in smuggling, standing in the courts of the U.S. Nvidia’s H20s, which are less powerful and available for purchase on DeepSeek, are still legal to ship to China, as the U.S. contemplated controlling them during the Biden presidency, and this issue is being discussed by Trump’s new officials. Dario Amodei, the CEO of Anthropic AI firm stated, “it appears that a substantial fraction of DeepSeek’s AI chip fleet consists of chips that haven’t been banned (but should be), chips that were shipped before they were banned; and some that seem very likely to have been smuggled.”
This implies that a significant portion of DeepSeek’s AI chip inventory is made up of chips that were either shipped to the country before the ban or chips that are not banned but should be, and others might be smuggled. The ban on exporting AI chips to China has been imposed by the U.S government, and it is now considering expanding these restrictions to other nations. The analysis of DeepSeek’s chip usage reveals the rising tensions between nations and mutual trust surrounding AI technology and chip supply chains.
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