U.S. investigating $2 billion Nvidia AI chip sales illegally funnelled to China via Singapore firm

A Singapore-based data center company is in the spotlight for allegedly funneling $2 billion worth of advanced Nvidia AI processors to China, circumventing strict American export controls. The case exposes the sophisticated global networks and legal loopholes being exploited as Washington attempts to block Beijing’s access to cutting-edge artificial intelligence hardware.

The company under scrutiny, Megaspeed International, is a little-known firm that significantly increased its purchases of Nvidia H-class AI accelerators in 2024 and 2025 before abruptly halting orders.

The Singapore connection and Chinese ties

U.S. and Singaporean authorities are actively investigating Megaspeed’s operations, which raise significant red flags regarding the ultimate destination of the high-value, restricted chips:

Unclear origins: Megaspeed was reportedly created after splitting from 7Road, a Chinese gaming and cloud company with state-backed investors. While Nvidia asserts that Megaspeed has no Chinese shareholders, investigators are focusing on its operational control and links to the Chinese mainland.

• Sanction loophole: Trade records indicate that the majority of Megaspeed’s $2 billion worth of chips were supplied through Aivres, the U.S. subsidiary of Inspur, a Chinese technology firm sanctioned by Washington in 2023 for supporting China’s military supercomputing. By using Aivres, a U.S. entity, Megaspeed created a two-hop supply path around sanctions targeting the parent company.

• Smuggling hub: Singapore has been identified by the U.S. Department of Justice (DOJ) as a frequent transit hub used to "conceal illegal shipments" to China, a practice authorities in both Singapore and Malaysia have vowed to crack down on.

The investigation reportedly intensified after a U.S. Commerce Department inspection found a substantial inventory of the advanced Nvidia chips still boxed and uninstalled. This is a key red flag, as legitimate data centers install such high-demand hardware immediately.

A growing concern for the U.S.

This $2 billion case comes amid broader reports of massive-scale chip diversion:

• Earlier this year, three individuals in Singapore were arrested and charged with fraud related to the diversion of AI servers worth an estimated $390 million to the Chinese AI firm DeepSeek. Research estimates that between 10,000 and several hundred thousand banned Nvidia chips may have been smuggled into China in 2024 alone.

  
  

• Nvidia maintains that it conducts due diligence and has found "no evidence" that its chips have been illegally diverted by its partners. However, officials like U.S. Commerce Under Secretary Jeffrey Kessler have directly contradicted these claims, stating, "It's happening. It's a fact."

The ongoing probe underscores the increasing difficulty of enforcing export controls in a complex global supply chain.