Singapore Probes Nvidia AI Chip Shipments By Middlemen To Malaysia Amid DeepSeek Scrutiny

One month after US officials launched an investigation into whether Chinese AI startup DeepSeek acquired Nvidia AI chips through shell companies in Singapore to bypass US trade restrictions, a new report suggests that Singapore has opened a probe into intermediaries allegedly funneling AI semiconductors into Malaysia.

Bloomberg reports that Singaporean officials are investigating middlemen who shipped Dell and Super Micro servers with AI chips from Singapore to Malaysia and potentially misrepresented the end users of the hardware, raising fresh concerns that these chips may have ultimately reached China.

Law Minister K Shanmugam told reporters earlier that several people have been arrested for procuring and shipping Nvidia chips to Malaysia, violating US chip restrictions. 

"The question is whether Malaysia was a final destination or from Malaysia it went to somewhere else, which we do not know for certain at this point," Shanmugam said. 

A little more than a month ago, we asked: Did DeepSeek Use Shell Companies In Singapore To Procure Nvidia Blacklisted Chips?

The new probe underscores the huge risk that Singapore-based companies may have funneled Nvidia chips through shell entities, ultimately delivering them to China and accelerating the country's AI sector despite chip restrictions from the US.

Officials in the Trump administration have spent the last month trying to determine whether DeepSeek used intermediaries in Singapore to evade US export controls.

US Commerce Secretary Howard Lutnick recently suggested that DeepSeek evaded US export controls. 

"Nvidia's chips, which they bought tons of, and they found their ways around it, drive their DeepSeek model," Lutnick said, adding, "It's got to end. If they are going to compete with us, let them compete, but stop using our tools to compete with us. So I'm going to be very strong on that."

Late last year, public trade data showed Brussels and Washington's efforts to block Moscow from accessing cutting-edge Western chips encountered a massive stumbling block after an Indian shell company was found to be exporting these chips to Russia. 

The Trump administration should consider slapping countries like Singapore with strict licensing requirements on Western chips and chip-making equipment to avoid this problem.