nvidia chips smuggled to china: singapore charges three in fraud scheme

2025-02-28 nvidia

Singapore, Friday, 28 February 2025.
singapore has charged three individuals, including a chinese national, for allegedly defrauding suppliers to illegally funnel nvidia’s advanced ai chips to deepseek, a chinese ai startup. the us government is investigating deepseek’s use of restricted technology. the investigation highlights concerns about export control loopholes. nvidia’s financial filings reveal singapore as its second-largest market after the us, accounting for 18% of its total revenue. however, only a fraction of these chips remain in singapore, with most being re-exported, raising questions about singapore’s role in the global chip trade.

Details of the charges

The individuals charged include Guo Jie, a 41-year-old Singaporean, Alan Wei Zhulun, a 49-year-old Singaporean, and Li Ming, a 51-year-old Chinese national [1][2]. Guo Jie and Wei Zhulun are accused of conspiring to defraud a server supplier in 2024 by falsely claiming that the products would not be transferred to unauthorized end-users [2][3]. Li Ming faces charges for allegedly defrauding a server supplier in 2023 by falsely stating that Luxuriate Your Life Pte Ltd, a Singapore-registered company, would be the end-user [1][2].

Singapore’s role and nvidia’s revenue

Singapore is a major market for Nvidia, ranking second only to the United States [1]. Nvidia’s recent filings indicate that Singapore accounts for 18% of its total revenue [1][2]. However, the actual volume of chips remaining in Singapore is significantly lower, with less than 2% of Nvidia’s total revenue coming from shipments to Singaporean clients in 2025 [1]. This discrepancy suggests that Singapore serves primarily as a transshipment hub, where chips are invoiced before being re-exported to other countries [1].

Potential impact on nvidia stock

The investigation into illegal chip exports to China could negatively affect Nvidia’s market position [GPT]. Heightened scrutiny and potential restrictions on chip shipments to China, a key market, may reduce revenue potential [7]. This incident could damage Nvidia’s reputation and competitive advantage, as concerns about compliance and ethical practices arise [1]. China’s defense ministry has warned Taiwan, adding geopolitical tensions that could impact the region [7].

Broader implications and responses

Singaporean authorities are taking the matter seriously, with the Minister of Foreign Affairs vowing to enforce multilateral export control regimes and stating that tax evasion, deception, and false declarations will not be tolerated [1][2]. This case is part of a broader investigation involving 22 individuals and companies suspected of making false declarations related to AI chip smuggling [1][2]. The US government is also examining Singapore’s role as a transshipment point for advanced semiconductors [1].

Bronnen

export control chip smuggling