Authorities in Singapore are investigating Megaspeed, a company that is a customer of the U.S. chip giant Nvidia, for allegedly helping Chinese companies circumvent strict U.S. export controls on advanced AI chips. The probe comes as the U.S. Commerce Department is reportedly conducting its own investigation into the matter.
The investigations put Nvidia in a tough spot, raising questions about its ability to track where its powerful chips end up effectively. The U.S. has banned the sale of its most advanced AI chips to China over fears they could be used to boost the country’s military.
According to The New York Times, Megaspeed, a company that spun off from a Chinese gaming firm, bought nearly $2 billion worth of Nvidia’s most advanced chips through its subsidiary in Malaysia. The report suggests Megaspeed was then using these chips in data centers in Malaysia and Indonesia to remotely serve customers in China, a legal gray area that has become a major concern for U.S. officials.
In a statement, Nvidia said it had looked into the matter and found “no reason to believe products have been diverted.” The company said it visited Megaspeed’s sites and confirmed it is “running a small commercial cloud, like many other companies throughout the world, as allowed by U.S. export control rules.”
This case is the latest example of the challenges the U.S. faces in enforcing its tech export bans. Experts have long warned about loopholes, and a massive black market for smuggled Nvidia chips has emerged. In response to the growing pressure, Malaysia recently announced it would start requiring permits for all exports of Nvidia chips.
