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Malaysia has announced it will take appropriate measures against local companies if they are implicated in a fraud investigation involving the alleged transfer of Nvidia chips from Singapore to China.
This development follows remarks made by Singapore’s Law and Home Affairs Minister K. Shanmugam, who indicated on Monday that the servers involved in the case might have hosted Nvidia’s artificial intelligence chips before being shipped to Malaysia.
On February 27, authorities in Singapore charged three individuals in relation to the fraud case, with local news sources reporting that these charges are tied to the purported movement of Nvidia components.
“We are trying to ascertain whether Malaysia was the final destination or if these items were bound for another location, which remains uncertain at this stage,” Shanmugam stated during a press briefing.
In an interview on CNBC’s “Squawk Box Asia,” Malaysian Minister for Investment, Trade and Industry, Tengku Zafrul Aziz, mentioned that the government does not have evidence to suggest that data center operators in Malaysia are misusing the chips. He explained that companies like Microsoft, Amazon Web Services, and Google are responsible for the importation of these servers.
Shanmugam also noted that Nvidia chips were integrated into servers provided by Dell and Supermicro, which were delivered to firms in Singapore before heading to Malaysia. He further asserted that there may have been misleading information regarding the ultimate destinations of these servers.
When asked if Malaysia is aware of the current whereabouts of the servers, Zafrul admitted, “we don’t know,” highlighting that discussions with data center companies are ongoing to determine whether the servers have been distributed appropriately.
“At this moment, we have not identified any such irregularities within Malaysia, and we are evaluating the situation. We will coordinate with Singapore authorities, and if there are any issues, the companies involved will need to answer to the relevant regulatory bodies,” he added.
Additionally, two Singaporeans were charged with criminal conspiracy to commit fraud concerning server suppliers, according to reports from CNA. Allegedly, they misrepresented information in 2024, claiming that the products would not be distributed to anyone other than the “authorized ultimate consignee of end users.”
These events come on the heels of a report from Reuters indicating that the U.S. Commerce Department is investigating whether the Chinese AI firm DeepSeek has been utilizing U.S.-made chips that are not permitted to be exported to China.
According to sources acquainted with the investigation, a network for smuggling AI chips to China has been traced back to Malaysia, Singapore, and the United Arab Emirates.
In conclusion, Zafrul emphasized to CNBC that Malaysia will closely monitor the destinations of these chips, questioning, “What I can confirm is that these chips were not intended for Malaysia originally. Thus, it raises the concern about their exit from Singapore.”
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