In three years "Megaspeed International" went from from inactive Chinese gaming subsidiary "to one of Asia's biggest buyers of cutting-edge semiconductors from the US," reports CNN.
"It is incredibly hard to look at this and not see a Chinese state-sponsored network for bypassing US export control networks," trade data investigator William George told CNN.
As Nvidia's Jensen Huang had an affair with Megaspeed executive Alice Huang, "Megaspeed quietly instilled billions of dollars of Nvidia chips in data centers across Southeast Asia," CNN writes, noting scrutiny of the company from the Singapore government and US officials "concerned that the company was passing those chips on to unauthorized Chinese buyers..."
In 2022, the US began restricting sales of semiconductors to China, including Nvidia's most advanced. While the controls were meant to curb China's tech industry, they also spawned opportunities for intermediaries willing to help circumvent them. US officials believe Megaspeed may be one of those... [T]rade records show Megaspeed has purchased more than $4 billion in chips and equipment from Nvidia... Based on indictments and investigative reports, research institute Epoch AI estimates that anywhere between 290,000 to 1.6 million advanced US semiconductors were sent to China in violation of export controls last year...
Singapore also initiated investigations into Megaspeed and its controllers, including Alice Huang, for potential false declarations relating to the company's server purchases and their final destinations. In a statement, Singapore's Ministry of Home Affairs said there was insufficient evidence that Huang had committed any related offenses, but she had been barred from re-entering the country after providing inaccurate information "to downplay her role" at Megaspeed. The other investigations are ongoing.
The exact scale of Chinese chip smuggling is impossible to quantify. However, its existence has become something of an open secret in the industry, as well as an indication that US efforts to keep adversaries from securing high-stakes technology still have fundamental flaws. A May report from the short seller Culper Research claimed that despite tightening trade restrictions, Chinese end-users still account for about 20% of Nvidia chip sales via illegal diversion and intermediaries in Southeast Asia.
CNN reminds readers that Jensen Huang accompanied US President Trump to events with Chinese leader Xi Jinping twice this year, and also lobbied for the US to relax controls on Chinese chip imports. "The US government ultimately approved several buyers for less-advanced Nvidia chips, known as H200, while collecting a quarter of the revenue."
"However, blacklisted companies have continued to obtain sensitive semiconductors as well," they add. And the Taiwanese government is even seeking to criminalize unauthorized exports of advanced AI chips to China, "as prosecutors there charged nine people in a scheme to sneak Nvidia chips into China through Japan, Indonesia and Hong Kong."
Read more of this story at Slashdot.
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