A Mystery CEO and Billions in Sales: Is China Buying Banned Nvidia Chips? (www.nytimes.com)

A New York Times investigation highlights a Commerce Department probe into Megaspeed, a Singapore‑based data‑center operator that purchased roughly $2 billion of Nvidia AI hardware last year and has close ties to Chinese firms. Megaspeed—spun out from Chinese gaming/cloud company 7Road in 2023—set up a Malaysian subsidiary, Speedmatrix, which imported multimillion‑dollar shipments of Nvidia H800 modules (example: a June 27, 2024 shipment of 120 H800 server modules valued at $25.4M from Aivres Systems Inc.). U.S. officials are examining whether those chips were used to remotely serve customers in China or diverted into China in violation of export controls; Singaporean and Malaysian authorities are also scrutinizing the company. Nvidia says its compliance review found Megaspeed to be non‑Chinese and found no evidence of diversion, while Megaspeed denies wrongdoing. The case underscores a technical and policy problem for the AI community: powerful AI accelerators can be funneled to sanctioned or restricted end users via subsidiaries, U.S.-based intermediaries (e.g., Inspur’s Aivres), shell companies and regional data centers—exploiting a legal gray area where overseas hosting can effectively run workloads for Chinese customers. For AI/ML practitioners and vendors this raises practical risks to supply‑chain integrity, export‑control compliance, and national security reviews; it also signals potential tighter enforcement, more granular end‑use checks, and heightened due diligence requirements for vendors of leading accelerators like Nvidia’s H800/H100 families.