Malaysia probes Megaspeed subsidiary over possible AI chip diversion

KUALA LUMPUR — Malaysia announced on Friday that it is probing a subsidiary of Megaspeed International over potential illicit transfer of high-performance AI chips to foreign nations. This move expands a growing controversy involving US chip giant Nvidia. The investigation unfolded on the same day Nvidia's CEO, Jensen Huang, stepped down amid a scandal involving alleged affair with Alice Huang, a woman suspected of being a Chinese intelligence agent and a former top executive at Megaspeed, a data center company based in Singapore.

Megaspeed is currently under investigation for allegedly redirecting Nvidia's AI chips to China, in violation of US export regulations aimed at curbing China's AI development. Malaysia's Ministry of Investment, Trade and Industry (MITI) revealed that Speedmatrix, Megaspeed's local entity, operates as a tenant in data centers within Malaysia, enabling it to import AI chips without any permit or license.

However, since July of last year, any individual or entity seeking to export, re-export, trans-ship, or transit high-performance US AI chips through Malaysia is now required to obtain a permit. MITI further warned that providing false information to customs officials regarding such items constitutes a serious offense.