U.S. and Singapore Investigate Megaspeed for Alleged Nvidia AI Chip Export Violations

2 hours ago

Newsroom

What sparked the $2 billion scandal involving Nvidia AI chips in Singapore?

How is the U.S. involved in the investigation of Megaspeed's alleged violations?

Why is this scandal significant for the global AI chip market?

U.S. and Singapore Investigate Megaspeed for Alleged Nvidia AI Chip Export Violations — Image source: Unblock Media

U.S. and Singapore investigate $2B Nvidia chip loophole
Megaspeed accused of aiding China in bypassing export laws

On October 10, 2025, U.S. and Singaporean authorities confirmed a joint investigation into Megaspeed, a Singapore-based technology firm, over allegations of illegal Nvidia AI chip transfers to China. The probe is focused on whether Megaspeed violated U.S. export control laws, which prohibit the transfer of advanced AI semiconductors to Chinese entities.

Central to the allegations is Megaspeed’s reported purchase of $2 billion in Nvidia AI chips through a Malaysian subsidiary. According to Cryptopolitan, these chips were then used in data centers in Malaysia and Indonesia, allegedly servicing Chinese enterprises in violation of U.S. regulations.

The New York Times disclosed that in late 2024, U.S. inspectors visiting a Megaspeed facility in Malaysia discovered Nvidia GPUs still in their original packaging. This unusual detail suggested potential re-export intentions rather than on-site use.

Nvidia denies any breach of export controls. A spokesperson told CNBC that Megaspeed operates a legitimate, law-abiding cloud business. The company emphasized that Megaspeed passed compliance checks, affirming it is wholly owned outside China with no Chinese shareholders.

Nonetheless, investigators have flagged possible links between Megaspeed and Chinese entities. Sources indicate Megaspeed, founded in 2023, was established as an offshore unit of 7Road, a Chinese cloud-computing firm with state-backed investors. Allegedly, Aivres Systems, a California subsidiary of Inspur—a Chinese company previously sanctioned by the U.S.—facilitated the Nvidia chip transactions.

This investigation underscores regulatory gaps in monitoring critical technology exports and has intensified scrutiny on Nvidia. In July 2025, Malaysia implemented new export licensing requirements for Nvidia chips to close loopholes. Simultaneously, U.S. lawmakers are advocating for tighter compliance mechanisms, such as advanced semiconductor tracking systems.

The Megaspeed probe illustrates the growing complexity of enforcing technology export controls amid escalating U.S.-China tensions. Singapore has played a role in related investigations, including a prior case concerning the suspected rerouting of Nvidia chips to China.