Nvidia Chip Fraud Probe: Malaysia's Response

Malaysian Trade Minister Tengku Zafrul Aziz addressed the ongoing investigation regarding a fraud case related to Nvidia Corp. chips that were allegedly routed from Singapore. He announced that the Malaysian government is prepared to take "necessary action" against local companies found to be involved in this connection.

Current Situation: During an appearance on CNBC’s "Squawk Box Asia," Zafrul clarified that there have not yet been any reported cases within Malaysia, emphasizing that authorities are actively investigating the situation. He indicated that there were no indications that data center companies in Malaysia are misusing the Nvidia chips in question.

This statement followed comments from Singapore's Law Minister K Shanmugam, who mentioned that the investigation involves servers that may have contained Nvidia AI chips, which were sent to Malaysian companies.

Shanmugam raised a question: "Was Malaysia the final destination, or did these servers continue on to other locations?" This inquiry highlights the complexity of the situation regarding the routing and use of these chips.

Legal Developments: Just days before Zafrul’s comments, Singapore charged three individuals with fraud in relation to what has become a significant case involving the movement of Nvidia chips. According to Shanmugam, these chips were embedded in servers supplied by Dell Technologies Inc. and Super Micro Computer Inc. to companies based in Singapore before they were sent to Malaysia.

When asked about the current whereabouts of the servers involved in the fraud case, Zafrul admitted, "We don’t know," adding that Malaysian authorities are verifying whether the servers were delivered to the appropriate recipients.

This investigation comes amid broader concerns about the restricted shipment of U.S. technology to China. Earlier this year, reports indicated that the U.S. Commerce Department was scrutinizing whether a Chinese AI startup, DeepSeek, had illegally utilized U.S. chips that are prohibited for export to China. It was reported that organized AI chip smuggling connected to locations like Malaysia, Singapore, and the United Arab Emirates has been monitored.

As the situation develops, Malaysian officials are committed to ensuring transparency and accountability regarding the use of technology and the illicit movement of chips between nations.

Nvidia, Fraud, Malaysia, Investigation, Chips