U.S. officials are investigating whether Chinese artificial intelligence startup DeepSeek skirted American export restrictions on advanced chip sales and bought advanced Nvidia (NVDA) semiconductors through third parties in Singapore, Bloomberg reported Thursday, citing people familiar with the matter.
Since DeepSeek was founded, Nvidia’s sales to Singapore are up a WHOPPING +740%. The US is now PROBING if DeepSeek bought Nvidia’s GPUs through third parties in Singapore. This will have MASSIVE implications.
On Monday morning, when the market collapsed on DeepSeek worries, Elon Musk commented on the situation. He says, DeepSeek “obviously” has ~50,000 Nvidia H100 chips that they can’t talk about due to US export controls. These chips cost over $30,000 EACH.
Our team looked into Nvidia’s financial statements and found this interesting line. Nvidia says “the end customer and shipping location may be different from our customer’s billing location.” They specifically note how shipments to Singapore end up in OTHER locations.
Over the last 3 quarter, Nvidia has produced more revenue from sales to Singapore than China. A whopping $17.4 BILLION of revenue came from Singapore versus $11.6 billion from China. Between the 2 countries, sales are roughly ~32% of Nvidia’s overall revenue.
Nvidia’s sales to Singapore surged a massive +185% year-over-year in their most recent quarter. The CAGR on revenue to Singapore since Q1 2021 has been +278%, more than DOUBLE the US CAGR of +133%. It’s also more than 5 TIMES China’s CAGR of +47%.
It gets even crazier. Check out their Q2 2024 earnings results where Nvidia saw a “casual” +535.6% YoY increase in sales from companies “in Singapore.” Again, the only criteria to be included as a sale to Singapore is to have a billing address in the country. Very strange.
Naturally, the next though is that maybe Singapore is actually using these chips. Perhaps Singapore is becoming the next datacenter hub or an AI-friendly country. So, we decided to look into data centers by country and see if this supports the recent surge in revenue.
Well, it gets even worse. While the US has 5,000+ data centers and China has nearly 500, Singapore doesn’t even beat Poland. In fact, Singapore has a whopping *99* datacenters, not even enough to make the top 20 list. So, where are all of these GPUs going then?
Note that China is currently importing more chips from Singapore than the United States. Not only have imports from Singapore surged in recent years, but the gap has widened. Keep in mind, this data likely understates imports from Singapore given a lot of data is not public.
This begins a US investigation that will have huge implications on both innovation and markets. If the US decides to restrict sales to Singapore, 20% of Nvidia’s revenue is at risk. Things are heating up.
Source : X
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