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Singapore authorities are investigating a fraud case involving servers from Dell (DELL, Financials) and Super Micro Computer (SMCI, Financials) that were shipped to Malaysia, raising concerns about potential violations of U.S. export controls.
According to Singapore's law minister, K. Shanmugam, the inquiry tracks the arrest of three people on charges connected to the alleged fraud involving the misrepresenting of the servers' eventual destination. Whether Malaysia was the planned ultimate destination or whether the servers were subsequently redirected elsewhere is still unknown.
The matter has attracted notice since the servers include potentially Nvidia (NVDA, Financials) processors. To stop powerful artificial intelligence chipsincluding those made by Nvidiafrom being sent to China, the United States has placed export limitations on them.
Initiated by an anonymous tip-off, Shanmugam claimed, no foreign authority asked for the probe. To clear things, Singapore has asked U.S. and Malaysian officials for further information.
The lawsuit fits under a larger issue about Chinese businesses reportedly buying Nvidia's chips via middlemen, therefore avoiding U.S. export restrictions. Chinese artificial intelligence business DeepSeek is under U.S. investigation for possibly purchasing limited Nvidia processors via companies situated in Singapore.
Chinese technological behemoths Alibaba (BABA, Financials), Tencent (TCEHY, Financials), and ByteDance (BDNCE) are aggressively buying Nvidia's H20 chip, which is still accessible under present U.S. export rules but may have future limits.
Nvidia said it will look into claims of illegal chip diversions to limited purchasers.
This article first appeared on GuruFocus.