After Singapore, it seems like a new shady purchase has been discovered in Malaysia, where $390 million worth of NVIDIA AI servers were found to end up in the country.
Singapore Prosecutors Identify "Fraudulent Transactions" With Malaysia, Potentially Involving High-End NVIDIA AI Servers From DELL & SMCI
With China's tremendous AI progress, questions have been raised about the nation's ability to acquire cutting-edge AI hardware from the likes of NVIDIA. Investigations then revealed a potential loophole that involved countries like Singapore supplying hardware to China through third-party sources, bypassing US export restrictions. This development made headlines all over the industry, but it seems like Singapore isn't the only one involved in this fiasco; rather, according to a report by Reuters, Malaysia seems to have gotten access to high-end AI clusters, and China's DeepSeek has allegedly used them.
The report states that Singapore prosecutors claim that local firms are involved in shipping servers to Malaysia worth over $390 million, and three men have been charged with fraudulent activity. Apparently, these servers include vendors like DELL and SMCI, both of which are key NVIDIA partners. It is highly likely that these clusters are from either of the newer generations, likely Hopper. Interestingly, the case is investigating whether these individuals were involved in misleading server suppliers about the actual end-user of the product.
It is now clear that high-end hardware is being moved to China through the involvement of Southeast Asian nations, which shows the ineffectiveness of US sanctions. Despite such transactions being illegal, they account for a high share of NVIDIA's revenue, with Singapore alone seeing NVIDIA sales rise by up to 740% over the past few months. Major shipments account for Team Green's Hopper accelerators and large-scale AI clusters.
China isn't having a hard time accessing computational resources, and it won't take long before Chinese firms get their hands on NVIDIA's Blackwell products. In addition, with China's domestic companies like Huawei scaling up their own solutions, it seems like the West needs to patch out these loopholes in order to maintain its superiority, at least when it comes to hardware capabilities.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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