While details of what Megaspeed is alleged to have done remain murky, experts say the case shows how Chinese firms rely on Southeast Asia to skirt U.S. trade controls.

“Chinese firms can access data centers in Singapore and Malaysia—and their computing capacity—without having to import restricted semiconductors,” Ja Ian Chong, a political science expert from the National University of Singapore (NUS), tells Fortune. “But the ease of shipping [chips] through Singapore and Malaysia also makes them attractive for firms and people who wish to circumvent U.S. controls.”

Washington restricts the export of Nvidia’s top-end Blackwell and Rubin chips to China, out of fear Beijing could use them to supercharge its AI ambitions.

According to The Information, Alice Huang, an executive at Megaspeed, used her personal relationship with Nvidia CEO Jensen Huang to move at least $7.5 billion worth of Nvidia chips through Megaspeed and its Malaysian subsidiary, Speedmatrix.

Singapore says it is investigating Megaspeed for “suspected breaches of our domestic laws,” but it separately rejected reports that its authorities were investigating Alice Huang over the espionage allegations. U.S. officials had also been investigating Megaspeed for potential export-control violations.

Megaspeed has denied wrongdoing; Nvidia has previously claimed that it found no evidence of illicit chip transfers.

Nvidia’s board said in a Nov. 8 statement that it was initiating an independent investigation into whether Huang was the target of a foreign intelligence effort, though it added it had no reason to believe “either national security or NVIDIA secrets were compromised.” The board said it “prioritizes U.S. national and economic security, which is paramount to the interests of NVIDIA and its shareholders.”

Following reports that Huang conducted a second affair, this time with an Nvidia executive, the chipmaker’s board is now considering removing Huang as CEO, the Wall Street Journal reports.

What is Megaspeed? 

Megaspeed is a Singapore-based neocloud that supplies AI computing power. Originally incorporated in 2015 as 7Road International, a Chinese gaming firm with ties to state-backed investors, the company changed its name to Megaspeed in early 2023, the same year that Alice Huang joined the company.

Another Singapore-registered firm, Swiftdata, acquired Megaspeed in November 2023. Alice Huang stepped down as Megaspeed’s managing director, while Singaporean businessman Tan Yong Pong—who owns Swiftdata—became its sole director. (Tan owns another Singapore-registered company, Monster Investment.)

In 2024, Tan established Speedmatrix, a Malaysia-based subsidiary of Megaspeed, which was reportedly used to receive shipments of Nvidia chips. According to the New York Times, between June 2024 and June 2025, Speedmatrix received over 200 shipments of restricted Nvidia technology. 

These chips—which are subject to U.S. restrictions on sales to China—were eventually used to power data centers built by Shanghai Century Litong, a Chinese firm in which Alice’s younger sister, Huang Yu, is a founding shareholder, according to The Information. The firm, which builds data centers in the Chinese cities of Shanghai and Shenzhen, then provides high-performance AI computing capacity to Chinese tech giants including Alibaba and Tencent. 

“AI chip distributors and resellers often spend too little effort vetting customers, usually relying on paperwork the customer provides,” notes Erich Grunewald, a senior researcher at the Institute for AI Policy and Strategy (IAPS), a U.S. nonpartisan think tank.

Why tap Singapore and Malaysia?

Malaysia has been one of Southeast Asia’s biggest beneficiaries of the AI boom, drawing $94 billion in data center investments between 2021 and mid-2026, including from global tech hyperscalers like Google, AWS and Microsoft. “Malaysia has ample land and relatively cheap electricity and water, at least for now,” Chong notes. “The fact that it sits next to key submarine cables also makes it attractive as a spot for data centers.” 

Singapore, on the other hand, is favored by multinationals for its open economy, stable political environment and business-friendly policies. Many AI firms, including U.S. firms Anthropic and OpenAI, have chosen to house their APAC headquarters there.

Companies like Megaspeed typically offer two routes to restricted silicon. The first is renting out chips already housed in data centers in Singapore and Malaysia—which, under current rules, is legal. The second is buying chips through front companies and shipping them to China, potentially in violation of U.S. export controls.

(Megaspeed reportedly did both: it set up data center operations in Sedenak Tech Park in the Malaysian state of Johor, and and, according to the reports, also shuttled chips to Shanghai Century Litong’s facilities in China.)

Under current U.S. export rules, it is legal to give Chinese companies access to AI processors housed outside of China—though previous deals have invited regulatory scrutiny. On Nov. 3, The Financial Times reported that Oracle had canceled a $7 billion deal to grant Tencent access to 100,000 AI chips in data centers across Southeast Asia after U.S. officials raised concerns. The FT also reported that Nvidia is telling cloud computing clients they must sell at least 51% of their services to non-Chinese companies.

The U.S. House of Representatives passed a law—the Remote Access Security Act—that would close the loophole allowing Chinese companies to use AI processors housed in other countries; the bill is now before the U.S. Senate.

Both Singapore and Malaysia have cracked down on chip smuggling. In addition to its investigation of Megaspeed, the Singaporean government last year charged three individuals with fraud after they diverted AI servers bound for Singapore to Malaysia instead. 

In October, Malaysian customs officials seized $12.1 million worth of advanced AI chips at Kuala Lumpur International Airport. Initial investigations found the 30 servers—falsely declared as electronic components—were being transferred from one Asian country to another, though though officials declined to say which.

Megaspeed, however, has denied the allegations. There has been no evidence of any violations concerning the illicit transfer of chips or any illegal activities, and this demonstrates that we are a compliant and legitimate company,” it wrote in a statement last December. “We operate fully within the bounds of all applicable export control regulations and maintain the highest standards of legal and ethical conduct.”

Chong says the escalating AI arms race between the U.S. and China means both Beijing and Washington will subject third parties like Singapore and Malaysia to deeper scrutiny to keep their own technology from leaking.

“Both Singapore and Malaysia will want to continue to benefit from trust by Beijing and Washington for as long as they can,” concludes Chong. “But they may face greater suspicion, scrutiny, restrictions and even punishment from one or both major powers going forward, and perceptions that they are unreliable or duplicitous partners will only increase such pressure.”