Malaysia probes Megaspeed unit over AI chip diversion

Malaysia said Friday it was investigating Speedmatrix, a local subsidiary of Megaspeed International, over the possible diversion of advanced US AI chips to other countries.

Malaysia's Ministry of Investment, Trade and Industry said Speedmatrix is a tenant at data centres in Malaysia and is allowed to bring AI chips into the country without a permit or licence. The ministry said that since July last year, any entity seeking to export, re-export, tranship or transit high-performance US AI chips from or through Malaysia must obtain a permit.

The ministry said it was working with the Royal Malaysian Customs Department to determine whether any chips brought into Malaysia had later been re-exported to other countries, and whether any such re-exports complied with the law. It said Speedmatrix “has never been cleared” of wrongdoing.

Megaspeed, a Singapore-based data centre company, is under scrutiny for allegedly steering Nvidia AI chips to China despite US export rules aimed at slowing Beijing's artificial intelligence development.

The Malaysian ministry said it was also working with authorities in Singapore and the United States and was considering further measures to strengthen controls.

Singaporean authorities have said servers containing the chips were being exported through Singapore to Malaysia and were suspected of being delivered to other destinations, contrary to declarations made in Singapore. Singapore said Thursday it had barred Alice Huang, a Chinese national and former Megaspeed executive, from re-entering the country in February for giving investigators inaccurate information about her role at the company, though she was not investigated for espionage.

The probe follows Nvidia boss Jensen Huang's resignation over an affair that was reported to involve Alice Huang. The controversy has wiped almost half a trillion dollars off Nvidia's market capitalisation.