Singaporean data cloud service company Megaspeed is suspected of circumventing U.S. chip export controls and providing a large number of Nvidia GPUs to Chinese companies. The U.S. Department of Commerce and the Singaporean authorities have launched investigations. Nvidia has denied any connection with China.
The New York Times reported, citing anonymous U.S. officials and people familiar with the matter, that Megaspeed, a Singaporean company with close ties to China, spent about $2 billion in the past to purchase AI processors from Nvidia, and then provided them to Chinese technology companies or re-exported them to China.
Chinese gaming company Seventh Avenue established a Megaspeed subsidiary in Singapore in 2023 to purchase large quantities of Nvidia AI GPUs, such as A100 and H100. What is puzzling is that Megaspeed does not place orders directly with Nvidia, but purchases them through the American company Aivres Systems.
Aivres Systems is part of China's Inspur Group, which was previously sanctioned by the United States for supplying supercomputer hardware to the Chinese military. However, Aivres Systems operates as a U.S. company. As long as it complies with U.S. export regulations, it can legally purchase Nvidia products and resell them (it has indeed done so). It is possible that regulatory loopholes were used to allow the blacklisted Inspur parent company to operate through Aivres Systems.
There are many doubts about the data centerSources pointed out that Megaspeed acquired Nvidia products and then transferred them to its subsidiary Speedmatrix's data centers in Indonesia and Malaysia. It is suspected of providing cloud services to Chinese customers remotely and even directly re-exporting them to China, but no conclusive evidence has yet been made public.
In late 2024, the Bureau of Industry and Security, an agency of the U.S. Department of Commerce, visited Megaspeed's data center in Malaysia. At that time, inspectors found that Nvidia GPUs were still sealed in boxes and unopened. This was quite suspicious for a data center in desperate need of AI chips. It may mean that the chips are waiting to be re-exported.
At the same time, a New York Times reporter found that Megaspeed's offices were almost empty: the Singapore location had only two employees and knew nothing about the company's business, and the Malaysia location had very little space and no engineers stationed there. Even the neighbors did not know its purpose.
Singapore police only told the New York Times that Megaspeed was being investigated for violating local laws, but did not specify which laws.
Nvidia also conducted its own investigation and found no clear evidence that Megaspeed directed chips to China. It denied that Megaspeed had direct contact with Chinese companies and emphasized that it has strengthened its customer investigation process. However, the rapidly growing AI market has also made it more difficult to track the final destination of chips.
As the United States expands its export control actions on AI hardware, Megaspeed has suspended the purchase of Nvidia hardware since July this year.
Singapore police probe Nvidia customer Megaspeed over alleged China export violations Singapore company allegedly helped China smuggle $2 billion worth of Nvidia AI processors, report claims — Nvidia denies that the accused has any China ties, but a U.S. investigation is underway