Malaysia says it’ll take action if firms involved in Nvidia fraud case

Malaysia said it will take “necessary action” against Malaysian companies if they are found to be involved in a fraud case linked to the alleged movement of Nvidia chips from Singapore to China.

That comes after Singapore Law and Home Affairs Minister K Shanmugam reportedly said on Monday that the servers in the fraud case may have contained Nvidia’s artificial intelligence chips which were then sent to Malaysia.

On Feb. 27, Singapore charged three men with fraud, with local broadcaster CNA saying it understood the cases are linked to the alleged movement of Nvidia chips.

“The question is whether Malaysia was a final destination or from Malaysia, it went to somewhere else, which we do not know for certain at this point,” Shanmugam told reporters.

Speaking to CNBC’s “Squawk Box Asia” on Tuesday, Tengku Zafrul Aziz, Malaysia’s minister for investment, trade and industry said the country has no information that data center companies operating in Malaysia are “not using the chips that they are supposed to be using.”

He said such servers are imported by data center companies such as Microsoft, AWS and Google.

Singapore’s Shanmugam had said Nvidia’s chips were embedded in servers supplied by Dell and Supermicro to Singapore-based companies, before they went to Malaysia. He added that “there may have been false representation on the final destination of the servers.”

When asked if Malaysia knew where the servers were now, Zafrul replied, “we don’t know,” adding that Malaysian authorities are discussing with the data center companies and checking if they have gone to the right parties.

“Right now, there’s no such cases in Malaysia to date, and we are investigating if they are. We’ll definitely discuss this with Singapore and well, the companies would then have to be held accountable by the relevant authorities,” he added.

CNA also reported two Singaporeans were charged with criminal conspiracy to commit fraud on a supplier of servers.

Citing charge sheets, CNA said they allegedly made false representations in 2024 that the items would not be transferred to a person other than the “authorized ultimate consignee of end users.”

The charges also come after Reuters reported in late January that the U.S. Commerce Department is looking into whether Chinese AI startup DeepSeek has been using U.S. chips that are not allowed to be shipped to China.

Citing a person familiar with the matter, Reuters said “organized AI chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates.”

Zafrul told CNBC that Malaysia will be checking the chips’ destination, but added, “what I can say today [is] the chips are not meant to be in Malaysia in the first place. So the question is, why is it going out of Singapore?”