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Nvidia’s CEO Jensen Huang presented the Blackwell GeForce RTX 50 Series GPU and RTX 5000 laptop during a keynote speech at the Consumer Electronics Show (CES) held in Las Vegas, Nevada on January 6, 2025.
Patrick T. Fallon | Afp | Getty Images
In 2024, Nvidia’s revenue dynamics shifted dramatically when Singapore emerged as its second-largest source of revenue, sparking significant concerns. Observers speculated that this development indicated Nvidia’s advanced artificial intelligence chips were being redirected to China.
The situation escalated in January following the rise of China’s DeepSeek on the global AI platform, noted for its sophistication and cost-effective measures. Despite existing export restrictions aimed at preventing Nvidia technology from reaching China, DeepSeek’s AI systems are reportedly powered by Nvidia’s graphics processing units.
In response to these concerns, Singapore has taken steps to dismantle an illicit network involved in trafficking Nvidia’s advanced AI chips. Recently, authorities detained three individuals accused of misrepresenting the ultimate destination of U.S.-manufactured servers, which likely housed the highly coveted Nvidia chips.
Singapore’s Home Affairs and Law Minister K Shanmugam indicated on Monday that servers from Dell and Super Micro Computer were redirected to Malaysia, prompting the essential query: Was Malaysia genuinely the intended endpoint?
Nvidia has chosen not to comment on these emerging situations.
Following these developments, Nvidia’s stock plummeted nearly 8% on Monday, marking a 14% decline in 2025, which has decreased the company’s market capitalization below $3 trillion. Super Micro’s shares also fell by 11%, while Dell experienced a dip of about 6%.
Despite allegations suggesting that Singapore may serve as a pathway to China, Nvidia made an important clarification in its annual report released last week. Singapore represented 18% of Nvidia’s total revenue, around $24 billion for the fiscal year ending on January 28, based on “customer billing location,” but accounted for less than 2% of actual products shipped to the nation, equating to approximately $473 million.
Nvidia clarified, “Customers use Singapore to centralize invoicing while our products are almost always shipped elsewhere.”
The recent arrests in Singapore underscore the persistence of an intricate network of resellers that operate even amidst heightened scrutiny.
Mizuho analysts have cautioned that a widespread ban on Nvidia chip exports to China could result in a revenue loss of $4 billion to $5 billion for the company this fiscal year. During a recent earnings call, Nvidia stated that data center sales in China represented a significantly reduced share of total data center revenue compared to pre-export control levels.
As the geopolitical landscape tightens, with increasing digital border enforcement between Eastern and Western markets, routes for illicit chip trafficking may adapt. Nonetheless, the fierce competition for AI supremacy guarantees that this complex and high-stakes narrative will persist, with ramifications that extend well beyond mere corporate profits.
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