Singaporean authorities have arrested three individuals on fraud-related charges linked to the alleged unauthorised re-export of Nvidia GPUs to DeepSeek, a Chinese AI firm, potentially bypassing US trade restrictions, according to ChannelNewsAsia (CNA).
A coordinated operation involving police and customs officials led to raids across 22 locations, resulting in the detention of nine suspects and the seizure of electronic devices and documents, news agency Reuters reported.
Speculation over Singapore’s role in GPU transfers
In 2024, Singapore unexpectedly emerged as Nvidia’s second-largest revenue hub, fuelling speculation that the city-state was serving as a transit point for smuggling GPUs into China. Nvidia denied these claims, emphasising that its billing locations do not determine the GPUs’ final destinations and stating that Singapore accounted for less than 2 per cent of its financial year 2025 shipments.
Concerns within the US Commerce Department grew after DeepSeek introduced its open-source AI model and chatbot, raising suspicions about whether the company had gained access to restricted chips. Reuters previously reported that restricted US semiconductors had made their way into entities such as the Chinese military, state AI research labs, and universities despite export controls.
A ChannelNewsAsia report indicated that a smuggling network may be operating through Singapore-based intermediaries, allegedly channeling high-performance Nvidia GPUs — crucial for AI and advanced computing — into China in violation of US export regulations. While the recent arrests shed light on local involvement in moving these restricted chips, authorities are still working to determine the full scope of the operation.
DeepSeek, for example, uses thousands of Nvidia Hopper GPUs, such as the H100, H20, and H800 models, to train its large-language models, whereas smaller research institutions may require significantly fewer units.
Singapore’s stance on export compliance
Last week, Singaporean officials reiterated that while the country is not bound by unilateral foreign export restrictions, companies operating within its borders are expected to comply with them where applicable. Authorities also warned that Singapore’s trade system must not be exploited to circumvent international regulations.
These arrests follow a US announcement from last month, stating that investigations were underway into potential collaborations between DeepSeek and Singapore-based entities to acquire Nvidia chips. Nvidia clarified that while it uses Singapore as a central hub for invoicing, its products are typically shipped elsewhere.
Source: Business Standard