Shanmugam: AI chips under US export controls moved through Singapore to Malaysia

SINGAPORE: Singapore’s Minister for Law and Home Affairs, K Shanmugam, has confirmed that servers containing Nvidia artificial intelligence (AI) chips, subject to US export restrictions, were transported through Singapore to Malaysia. The authorities have charged three men with fraud related to the movement of these products, and investigations are ongoing. Speaking to state media on 3 March, Shanmugam clarified that companies Dell and Supermicro supplied the servers to Singapore-based firms, which then shipped them across the border. However, it remains uncertain whether Malaysia was the final destination or if the servers were re-exported elsewhere. Shanmugam emphasised that Singapore’s investigation was conducted independently, without requests from the US or any other country. “There has been some speculation linking this case with the potential circumvention of US export controls for advanced Nvidia chips. Now this case is unrelated. It’s an independent investigation conducted by Singapore,” he said. Authorities have requested information from both US and Malaysian officials to determine the full extent of the shipments. Since the supply companies are linked to the US, Singapore requires documentation from American authorities. Additionally, information about the movement of the servers within or beyond Malaysia falls under its jurisdiction.

Three men charged, more under investigation

On 27 February, two Singaporeans, Aaron Woon Guo Jie, 41, and Alan Wei Zhaolun, 49, were charged with criminal conspiracy to commit fraud on a supplier of servers. Charge sheets indicate that they falsely represented in 2024 that the items would not be transferred to unauthorised recipients. A third individual, Chinese national Li Ming, 51, was charged separately with fraud by false representation. In 2023, he allegedly claimed that the servers’ end user would be a company named Luxuriate Your Life. The offence of fraud by false representation carries a penalty of up to 20 years in prison, a fine, or both. Six other individuals remain under investigation, along with the companies involved. The charges follow a multi-agency raid conducted across 22 locations in Singapore on 26 February, led by the Singapore Police Force and Singapore Customs. Authorities seized electronic and documentary records as part of their ongoing inquiries.

Possible links to Chinese AI firm DeepSeek

According to CNA, the investigation is linked to reports that the servers were ultimately destined for DeepSeek, a Chinese AI company. The US Commerce Department is reportedly investigating whether DeepSeek has acquired Nvidia chips that were not authorised for shipment to China. A broader international probe has tracked AI chip smuggling operations through multiple countries, including Malaysia and the United Arab Emirates. However, Shanmugam noted that Singapore is likely not the only transit point for such shipments.

MTI stated on 1 Feb that Nvidia had no reason to believe DeepSeek obtained export-controlled products from Singapore

Singapore has reiterated its position that businesses operating within its jurisdiction must adhere to both Singaporean and relevant foreign laws. On 1 February, the Ministry of Trade and Industry (MTI) reaffirmed that US companies based in Singapore are expected to comply with both US and Singaporean regulations. According to the statement, Nvidia has reviewed its shipments and reported no indications of any violations involving DeepSeek. “Nvidia has stated that there is no reason to believe that DeepSeek obtained any export-controlled products from Singapore,” MTI said. Second Minister for Trade and Industry Tan See Leng stated in Parliament on 18 February that Singapore is not legally required to enforce another country’s unilateral export controls but expects businesses to take such laws into account. “Singapore does not condone businesses deliberately using their association with our country to circumvent or violate export controls of other nations,” Tan said. Shanmugam underscored that enforcement is key in such cases, noting that Singapore has “very good laws” to manage its domestic situation but needs cooperation from international counterparts to address broader supply chain issues. “As you can see, the issue is not with the law. We have the laws. It’s with enforcement, and we are enforcing,” he said. “But where you have an international chain of events, it will not be possible for any one country to deal with this by itself.”