Singapore Investigates Potential Fraud In Nvidia AI Chip Shipments: 'The Question Is Whether Malaysia Was A Final Destination'

Singapore authorities have initiated an investigation into potential fraudulent activities related to the shipment of Nvidia Corp. NVDA chips. The chips, which are banned in China, were reportedly shipped to Malaysia via servers from Dell Technologies Inc. DELL and Super Micro Computer Inc. SMCI.

What Happened: Singapore’s Home Affairs and Law Minister K Shanmugam, provided details about the ongoing investigation following local media reports of several arrests. The arrests were connected to the suspected acquisition and export of Nvidia chips, which violated U.S. sanctions, as per a Bloomberg report

The parties under investigation reportedly misled server suppliers about the actual users of the hardware. The hardware was shipped from Singapore to Malaysia, and authorities are now investigating whether the servers, manufactured by Dell and SMCI, were further shipped to other countries.

"The question is whether Malaysia was a final destination or from Malaysia it went to somewhere else, which we do not know for certain at this point," said Shanmugam.

The investigation is centered on the involvement of Singapore-based entities in possibly diverting Nvidia chips to China and other countries restricted by the U.S. This investigation follows a recent U.S. inquiry into whether the Chinese AI company DeepSeek circumvented U.S. chip restrictions with assistance from third parties in Singapore.

Shanmugam did not particularly name DeepSeek and clarified that the investigation is independent of US export controls and was initiated by Singapore following an anonymous tipoff. The final destination of the servers is still being determined, with additional information requested from the U.S. and Malaysia.

SEE ALSO: SMCI Co-Founder Cashes Out Millions In Stock A Day After Super Micro’s Delayed Filings

Why It Matters: This investigation comes on the heels of a recent incident where three men were charged with fraud in Singapore for allegedly smuggling Nvidia chips to China, bypassing U.S. export controls. The men were among nine people arrested when Singapore authorities raided 22 locations. The cases involved chips allegedly destined for Chinese AI firm DeepSeek, as reported by local media CNA, citing sources. Furthermore, according to a previous Reuters report, Chinese universities and research institutes acquired Nvidia’s advanced AI chips through server products manufactured by Dell, Super Micro, and Taiwan’s Gigabyte Technology.

However, DeepSeek has denied the reports previously and acknowledged using Nvidia’s H800 chips, which it was legally permitted to purchase in 2023, and also revealed a supercomputing AI cluster powered by Nvidia A100 chips.

Meanwhile, the United States is already conducting a probe into whether DeepSeek has been using U.S. chips that are restricted from being shipped to China. The Trump administration is also evaluating plans to impose maximum limits on AI computing power exports to Southeast Asia and the Middle East, regions that U.S. officials believe are more susceptible to Chinese influence.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.