Malaysia trade ministry investigates Chinese firm using Nvidia chips: report

The Malaysia Ministry of Investment, Trade and Industry is investigating a Chinese company using servers equipped with Nvidia (NASDAQ:NVDA) chips for training artificial intelligence models, according to a report by Reuters.

This follows previous reports that Chinese engineers flew into Malaysia back in March carrying suitcases stuffed with hardware.

The trade ministry “is still in the process of verifying the matter with relevant agencies if any domestic law or regulation has been breached,” Reuters reported. The Biden Administration capped the number of advanced AI chips the country could receive. However, the Trump Administration has rescinded these.

Singapore is also investigating a fraud case involving Dell (DELL) and Super Micro Computer (SMCI) servers supplied to Singapore-based companies and then shipped to Malaysia, which may have contained Nvidia chips that the U.S. has barred from China.

“The case relates to servers with chips embedded in them coming into Singapore, and then from Singapore, they went to Malaysia,” said K. Shanmugam, Singapore’s law minister. “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. But we assessed that there may have been false representation on the final destination.”

U.S. officials have been investigating if DeepSeek (DEEPSEEK), the Chinese startup that recently disrupted the AI industry, acquired advanced Nvidia chips through third parties in Singapore to circumvent U.S. export curbs.