Nvidia CEO Jensen Huang holds a Blackwell GeForce RTX 50 Sequence GPU (L) and a RTX 5000 laptop computer as he delivers a keynote handle on the Client Electronics Present (CES) in Las Vegas, Nevada on January 6, 2025.
Patrick T. Fallon | Afp | Getty Photos
Alarm bells went off in 2024 when Singapore unexpectedly emerged as Nvidia’s second-largest income supply. The disclosure fueled widespread hypothesis that Nvidia’s synthetic intelligence chips have been being channeled to China.
These considerations intensified in January after China’s DeepSeek burst onto the worldwide AI scene as a result of sophistication and reported cost-effectiveness of its mannequin. DeepSeek’s AI is skilled on Nvidia’s graphics processing models regardless of export restrictions designed to maintain the expertise out of China.
Singapore has been working to dismantle a shadow community trafficking Nvidia’s cutting-edge AI chips, and late final week, authorities there detained three folks on expenses of intentionally misrepresenting the ultimate vacation spot of U.S.-manufactured servers, probably containing Nvidia’s extremely sought-after chips.
Singapore’s Dwelling Affairs and Regulation Minister Ok Shanmugam revealed Monday that servers from Dell and Super Micro Computer have been shipped to Malaysia, elevating the crucial query: Was Malaysia actually the ultimate vacation spot?
Nvidia declined to offer touch upon any of those developments.
Nvidia shares tumbled nearly 8% on Monday and are actually down 14% in 2025, a slide that is pushed the corporate’s market cap under $3 trillion. Tremendous Micro shares fell 11% on Monday, and Dell’s inventory was down about 6%.
Whereas Singapore has firmly rejected allegations of serving as a conduit to China, Nvidia highlighted an important distinction in what it means to be a buyer in its annual report filed final week.
Singapore accounted for 18% of Nvidia’s whole income, roughly $24 billion, within the fiscal yr ended Jan. 28, primarily based on “buyer billing location,” however lower than 2% of income, about $473 million, by way of merchandise shipped to the nation.
“Clients use Singapore to centralize invoicing whereas our merchandise are nearly at all times shipped elsewhere,” Nvidia mentioned in its annual report.
The arrests in Singapore show {that a} refined community of resellers continues to function regardless of rising scrutiny.
Analysts at Mizuho warn that any complete ban on Nvidia chip exports to China might eradicate $4 billion to $5 billion from Nvidia’s projected income for this fiscal yr. The corporate mentioned on its fourth-quarter earnings name that information middle gross sales in China as a share of whole information middle income “remained effectively under ranges seen on the onset of export controls.”
As digital borders harden between East and West, silicon smugglers might discover new routes. However the race for AI dominance ensures this high-stakes recreation will proceed, with implications far past company earnings.
