TMTPOST --  The U.S. government is investigating whether Chinese artificial intelligence (IT) upstart DeepSeek has bypassed export controls on advanced chips made by Nvidia Corporation to power its tech innovations that stunned both Silicon Valley and Washington, recent reports suggested.

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The U.S. Department of Commerce is investigating whether Deepstart has been using American chips that are banned from export to China, Reuters cited  people familiar with the matter on Friday. It was said that chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates.

Following Reuters, Bloomberg learned from people familiar with the matter that the Commerce Department is looking into if DeepSeek obtained advanced Nvidia chips through third parties in Singapore, which is deemed as evasion of restrictions.

Officials in the White House and Federal Bureau of Investigation (FBI) are also working to determine whether DeepSeek used intermediaries in Singapore to purchase Nvidia chips that are the U.S. government doesn’t allow sale to China, according to the report.

Neither the Commerce Department, the White House, the FBI nor DeepSeek commented on these reports.

An Nvidia spokesperson said many of the U.S. AI chip giant’s customers have business entities in Singapore and use those entities for products destined for the United States and the West.

"Our public filings report ‘bill to’ not ‘ship to’ locations of our customers," the spokesperson said in a statement. " We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, act accordingly."

In his U.S. Senate confirmation hearing Wednesday, U.S. President Donald Trump’s Commerce Secretary nominee, Howard Lutnick vowed to ramp up tech curbs on China and claimed DeepSeek evaded U.S. export controls.

“Nvidia’s chips, which they bought tons of, and they found their ways around it, drive their DeepSeek model,” Lutnick told senators. “It’s got to end. If they are going to compete with us, let them compete, but stop using our tools to compete with us. So I’m going to be very strong on that.”

The CEO of AI company Anthropic, Dario Amodei, earlier this week expressed his doubts on source of chips that DeepSeek used to power its innovations. "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," Amodei said.

Trump administration officials are exploring extra curbs on the sale of Nvidia chips to China,  Bloomberg sources revealed on Wednesday.  The sources stressed the related conversation is in very initial stage as the new team works through policy priorities.

It was reported the possible measure that officials focused on is to expand restrictions to cover Nvidia H20 chips, which can be used to run AI software and were designed to comply with existing U.S. restrictions on China imposed by the Biden administration.  H20 chips, the scaled-down offering tailored for China, are Nvidia’s response to regulations introduced by the Biden administration in October 2023.

Two lawmakers Thursday called on the Trump administration to weigh export curbs on Nvidia’s H20 and chips of similar sophistication for national security, alleging DeepSeek has extensively leveraged H20 chips to launch its AI model released recently.

In their letter to National Security Advisor Michael Waltz, Chairman John Moolenaar, a Republican, and Ranking Member Raja Krishnamoorthi, a Democrat, of a House committees focusing on the Sino-U.S. competition, asked for the move as part of a review ordered by Trump to scrutinize the U.S. export control system in light of "developments involving strategic adversaries."