itstargetnews
Singaporean authorities are investigating artificial intelligence computing company Megaspeed, a client of the U.S. artificial intelligence chipmaker NVIDIASuspected of helping Chinese companies evade U.S. chip export restrictions.
“The Singapore Police Force confirms that it is investigating Megaspeed for alleged breaches of domestic law,” police told CNBC in an email.
The New York Times investigates report On Thursday, the Commerce Department also said it was investigating whether Megaspeed circumvented U.S. export controls, citing anonymous officials and other people familiar with the matter.
The two investigations into Megaspeed are likely to raise questions about Nvidia’s ability to effectively track its chip exports and comply with U.S. restrictions on its sales of its most advanced artificial intelligence chips to China.
According to a Nvidia spokesperson, the company has engaged with the U.S. government about the matter and is conducting its own investigation, but did not identify “any reason to believe that product has been diverted.”
“NVIDIA revisited multiple Megaspeed sites earlier this week and confirmed what we had previously observed – that Megaspeed, like many other companies around the world, is running a small commercial cloud, which is allowed under U.S. export control rules,” they said in a statement shared with CNBC on Friday.
Neither Megaspeed nor the Commerce Department immediately responded to requests for comment.
Megaspeed, which was spun off from a Chinese gaming company in 2023, purchased nearly $2 billion worth of Nvidia’s most advanced products through its Malaysian subsidiary, The Times reported.
Export vulnerability concerns
The case surrounding Megaspeed highlights broader concerns about the effectiveness of U.S. export restrictions on advanced technologies such as Nvidia’s artificial intelligence processors.
For years, the U.S. government has restricted the sale of advanced artificial intelligence chips to China, citing concerns that they could bolster Beijing’s military capabilities and give it an advantage in broader artificial intelligence development.
But experts and lawmakers in Washington have long warned of gaps in Washington’s export controls, and there are reports that a massive black market has emerged for smuggling Nvidia chips.
House Select Committee on China April question Nvidia has shipped chips to China and Southeast Asia following reports that Chinese artificial intelligence startup DeepSeek used the company’s chips to train groundbreaking artificial intelligence models.
Just months ago, Singapore launched a separate investigation into the alleged smuggling of restricted Nvidia chips, which were announced to be destined for Malaysia but may have been diverted elsewhere, including China.
In response to such cases and mounting pressure from the United States, Malaysia announced in July that it would begin requiring license Applies to all exports and transfers of Nvidia chips.
Outsourcing to Southeast Asia?
Chinese companies are also exploiting legal gray areas by tapping the computing power of Southeast Asian data centers equipped with restricted Nvidia chips, according to recent reports.
For example, the Times reported that Megaspeed uses Nvidia chips in data centers in Malaysia and Indonesia that appear to be serving customers remotely in China.
Nvidia did not respond directly to the claim, but said in a statement that the Trump administration’s recent AI action plan “rightly encourages companies around the world to embrace American standards and American leadership, which is beneficial to national and economic security.”
The Trump administration recently expressed interest in ensuring that Nvidia retains its global market dominance — even in China — despite Artificial Intelligence Action Plan It also called for stronger enforcement of global export controls.
Lawmakers in Washington have also introduced bills that could require Nvidia to equip its chips with a tracking system.
The proposals have met with resistance from Beijing, which froze imports of Nvidia chips after the Trump administration said it would lift restrictions on some of the company’s chips made specifically for China.
