Singaporean authorities are investigating AI computing company Megaspeed, a client of the US AI chip maker NvidiaAllegedly to help Chinese companies evade restrictions on US chip exports.
“The Singapore Police Force confirms that investigations into Megaspeed are ongoing for suspected violations of our local laws,” police told CNBC in an email.
The investigation comes as The New York Times I mentioned on Thursday that the US Commerce Department was also investigating whether Megaspeed had bypassed US export controls, citing unidentified officials and other people familiar with the matter.
The dual investigations into Megaspeed could raise questions about Nvidia’s ability to effectively track its chip exports and comply with U.S. restrictions on selling its most advanced artificial intelligence chips to China.
According to an Nvidia spokesperson, the company has engaged the US government in the matter and conducted its own investigation, without specifying “any reason to believe the products have been diverted.”
“NVIDIA visited several Megaspeed sites again earlier this week and confirmed what we had previously observed, as Megaspeed operates a small commercial cloud, like many other companies around the world, as permitted by US export control rules,” they said in a statement shared with CNBC on Friday.
Megaspeed did not immediately respond to a request for comment, nor did the US Department of Commerce.
Megaspeed, which spun off a Chinese gaming company in 2023, has bought nearly $2 billion worth of Nvidia’s most advanced products through its subsidiary in Malaysia, the Times reported.
Concerns about the export loophole
The case surrounding Megaspeed highlights broader concerns about the effectiveness of US export restrictions on advanced technologies, such as Nvidia’s artificial intelligence processors.
The U.S. government has, for years, restricted sales of advanced AI chips to China, citing concerns that they might bolster Beijing’s military and give it an advantage in broader AI development, among other things.
But experts and lawmakers in Washington have long warned of loopholes in Washington’s export controls, while reports suggest a huge black market for smuggled Nvidia chips is emerging as well.
House Select Committee on China in April He doubted Nvidia shipped chips to China and Southeast Asia after reports that Chinese AI startup DeepSeek used the company’s chips to train a leading AI model.
Just a few months ago, Singapore launched a separate investigation into the alleged smuggling of banned Nvidia chips, which were declared destined for Malaysia but may have been diverted elsewhere, including China.
In response to such cases and increasing US pressure, Malaysia announced in July that it would begin demanding this Permits For all Nvidia chipset exports and transfers.
Outsourcing to Southeast Asia?
Chinese companies have also exploited a legal gray area by leveraging computing power from data centers in Southeast Asia equipped with captive Nvidia chips, according to recent reports.
For example, Megaspeed has been using its Nvidia chips for data centers in Malaysia and Indonesia, which appear to serve remote customers in China, according to the Times.
Nvidia did not address the claim directly, but said in its statement that the Trump administration’s latest AI action plan “rightly encourages companies around the world to embrace American standards and American leadership, which benefits national and economic security.”
The Trump administration has recently shown interest in ensuring that Nvidia maintains its dominance of the global market – even in China – although… Artificial intelligence business plan He also called for strengthening the enforcement of export controls globally.
Lawmakers in Washington have also proposed bills that could require Nvidia to equip its chips with tracking systems.
Such proposals have met opposition from Beijing, which froze imports of Nvidia chips after the Trump administration said it would roll back restrictions on some of the company’s chips manufactured specifically for China.
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