Site visits, interviews shed light on chip buyer's opaque operation

On a humid June night in 2024, Mr Jensen Huang, the chief executive of Nvidia, held court with several of his company’s major Asian customers at a bar with sweeping views of Taipei, Taiwan. They stood and toasted the booming artificial intelligence (AI) industry.

- Ana Swanson, Tripp Mickle, Paul Mozur and Mara Hvistendahl

Next to the Nvidia chief was a woman named Huang Le, or Ms Alice Huang, an executive of a Singapore-based data centre company called Megaspeed, which was poised to buy US$2 billion (S$2.6 billion) of Nvidia AI technology over the next year.

Though Ms Huang and Megaspeed are little-known players in the AI industry, their association with Nvidia and its CEO has recently become a preoccupation in Washington.

US Commerce Department officials have been investigating whether Megaspeed, which has close ties to Chinese tech firms, is helping companies in China sidestep US export restrictions, according to more than half a dozen current and former officials and other people familiar with the companies.

The inquiry, which is active, calls into question how closely Nvidia is tracking where its AI chips end up and highlights the possibility of American export laws easily being sidestepped.

Megaspeed is also facing scrutiny from the Singapore police, who told The New York Times ina statement that they are investigating the company for breaching local laws, without elaborating further.

As the dominant provider of AI chips, Nvidia’s annual revenue has soared nearly sevenfold in the past four years, making it the world’s most valuable publicly traded company.

But the company’s meteoric rise has coincided with US government concerns that its chips could help countries such as China develop new weapons, surveil dissidents and leap ahead of the US in AI development.

Those concerns led both the Biden and Trump administrations to crack down on AI chip sales to China. But some Chinese companies employ global networks of middlemen and shell companies to sidestep those limits. Ina legal grey area, some have built vast data centres in Southeast Asia that have fuelled China’s gains in AI.