Singapore police are digging into Megaspeed, a high-profile Nvidia customer, over claims that the company helped Chinese firms get around U.S. export restrictions on powerful AI chips.
According to CNBC, the Singapore Police Force confirmed in an email that an investigation into Megaspeed is active, focused on “suspected breaches of our domestic laws.”
That investigation is now being matched by a second one in the United States, where the Commerce Department is also examining whether Megaspeed sidestepped American export controls on restricted chips.
Both investigations are zeroing in on whether Megaspeed, which is based in Singapore but has ties across Southeast Asia, acted as a middleman to funnel Nvidia’s high-end AI processors to China, despite existing bans.
The New York Times was first to report that U.S. officials were now actively reviewing Megaspeed’s operations, and the timing couldn’t be worse for Nvidia, which is already under scrutiny over how its chips keep ending up in Chinese systems.
U.S. officials question Megaspeed’s $2B chip supply to Southeast Asia
Megaspeed used its Malaysian subsidiary to buy nearly $2 billion worth of Nvidia’s most advanced AI chips, according to the New York Times.
Those chips, the paper said, were installed in data centers in Malaysia and Indonesia, and appeared to be remotely serving Chinese clients, even though Nvidia chips like these are banned from being shipped directly to China under current U.S. laws.
In response, Nvidia told CNBC that it had already looked into the matter and didn’t find anything off. “Nvidia visited multiple Megaspeed sites yet again earlier this week and confirmed what we previously observed—Megaspeed is running a small commercial cloud, like many other companies throughout the world, as allowed by U.S. export control rules,” a company spokesperson said in a written statement.
The case puts new heat on Nvidia at a time when lawmakers in Washington are already pushing for tighter enforcement of export laws. In April, the House Select Committee on China flagged concerns after reports surfaced that a Chinese AI firm, DeepSeek, used Nvidia’s chips, intended for Southeast Asia, to train its latest AI model.
That triggered questions in Congress about whether Nvidia was doing enough to monitor where its products really end up.
Back in Singapore, this isn’t the first time chip transfers have raised alarms. A few months ago, local officials opened a separate case involving restricted Nvidia chips that were declared as headed for Malaysia, but may have been rerouted to China.
The Megaspeed probe now appears to be part of a broader crackdown that stretches across the region.
Malaysia tightens exports while Washington pushes for chip tracking
After rising pressure from Washington, the government in Malaysia announced in July that it would begin requiring permits for all exports and transfers of Nvidia chips. That was seen as a response to fears that Southeast Asia had become a loophole in U.S. efforts to restrict China’s access to critical AI hardware.
Meanwhile, a legal gray area has opened up. Reports indicate Chinese companies have started relying on Southeast Asian data centers, like those operated by Megaspeed, to rent remote access to restricted computing power.
That method technically avoids shipping chips across borders, but still gives Chinese users access to performance levels they’re not supposed to have.
Nvidia didn’t specifically comment on that workaround, but pointed to the Trump administration’s new AI Action Plan, which it says “rightfully encourages businesses worldwide to embrace U.S. standards and U.S. leadership, benefiting national and economic security.” That same plan, however, also calls for stronger enforcement mechanisms, and that’s where things get sticky.
Lawmakers in D.C. are now pushing for new laws that would force chipmakers like Nvidia to install tracking systems in every chip they export. These systems would tell U.S. regulators exactly where each chip ends up.
Some bills have already been introduced, though none have passed yet.
The idea has faced fierce resistance from Beijing, which responded by freezing Nvidia imports altogether. The Chinese government pulled the plug on even those chips that were custom-designed by Nvidia for the Chinese market.
That decision came just after the White House announced it would roll back some of the previous restrictions, raising questions about who’s actually in control of this back-and-forth.
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