SBS Investigation: 240,000 AI Chips Worth $7.5 Billion Entered China
Key Facts
A report published by SBS on November 11 said at least 240,000 Nvidia AI chips entered China or were made available to Chinese companies through an alleged network, with a value of about $7.5 billion. That scale puts distribution channels and access to computing capacity at the center of growing scrutiny over advanced chips reaching the Chinese market. According to the report, the network included companies in Singapore, Shanghai and Malaysia, which supplied chips to Chinese AI companies. Reuters reported the previous day, citing a report by The Information, an estimate of about 240,000 H100 and H200 chips and some A100s, but said it could not independently verify the reports. SBS's estimate, by contrast, covers the total number of chips attributed to the alleged route without limiting its account to those models.
According to SBS, Alice Huang, her husband and her sister began setting up companies linked to the network in 2023. The entities included Megaspeed in Singapore, Century Ritung in Shanghai and Speedmatrix in Malaysia. In October 2023, Nvidia granted Century Ritung preferred cloud partner status, the report said. It said Century Ritung resupplied imported chips to Chinese companies through circuitous routes, including Alibaba and Tencent. It also attributed to Huang the provision of computing capacity to Chinese companies through remote access to data centers built by Speedmatrix, broadening the case from the movement of hardware itself to computing services that can be provided across borders.
The SBS report attributed to foreign media reports suspicions that Kang Wei, whom it described as Huang's husband, was involved in setting up companies and indirectly exporting chips. The published account draws on roles attributed to multiple companies across more than one jurisdiction, including importing chips, resupplying them and providing access to data centers. In Singapore, police said investigations into Megaspeed were ongoing and they could not comment further at this time. Police said Singapore does not apply unilateral export controls imposed by foreign countries, but it does not tolerate deliberate circumvention of those controls or breaches of local laws. The government also denied that it or its officials had said they investigated Huang or suspected her of intelligence links.
The investigations come amid enforcement action in Malaysia, where authorities announced on October 28 that they had seized 30 servers equipped with advanced AI chips in the free trade zone at Kuala Lumpur airport. Customs said the seizure took place on October 15 on suspicion of violating export controls. The shipment's final destination was unclear, according to the authorities, because the investigation was still ongoing. In a statement issued on February 1, 2025, Singapore's Ministry of Trade and Industry said most shipments associated with Nvidia revenue recorded in Singapore were destined for elsewhere, and shipments to Singapore itself were negligible. The statement at the time said Singapore accounted for about 22% of the company's revenue, according to a quarterly disclosure, and warned against equating the location where revenue is recorded with the chips' destination.
At the company level, Nvidia's board announced on November 8 that it had opened an independent investigation overseen by a committee of independent directors, with the assistance of outside legal counsel. The board said it saw no reason to believe national security or company secrets had been compromised. In the United States, the Associated Press reported that the Justice Department had taken over the investigation from the Commerce Department and that the national security division was investigating whether Megaspeed had violated export control laws, with Huang included in the investigation, according to a person familiar with the matter. These remain proceedings and investigations; the statements cited here include no ruling establishing the alleged violations by the network. Authorities' announced focus is on the export route and compliance with laws, alongside the company's independent review of the facts.
Nvidia shares moved as reports mounted, but available closing data do not establish that the case alone drove the price change. Nvidia closed at $168.89 a share on November 10, according to EL7 data. The Associated Press reported that the stock fell 4.3% on Monday, November 9, wiping out about $190 billion in market value, then ended Tuesday down about 5.5%. Reuters estimated during trading through November 10 that the company was on course to lose more than $470 billion in market value over two sessions; that was a real-time estimate, not a confirmed closing figure. The Reuters report also said strong U.S. inflation data increased expectations of an interest rate hike the following month, describing it as an additional factor weighing on selling pressure.
The fallout extended to Washington: Senate Democratic Minority Leader Chuck Schumer called on the administration to provide answers and impose tighter restrictions on chip exports to China, while Republican Senator Kevin Cramer urged Huang to resign as chief executive, according to Reuters. A class action was also filed against Nvidia and its chief executive, Jensen Huang, accusing them of misleading investors; a retail investor is seeking unspecified damages and a jury trial, according to the Associated Press. The available information does not provide an outcome in the lawsuit or a court ruling resolving the allegations. Attention now turns to the results of the Justice Department's ongoing investigation into Megaspeed, the Singapore investigation and Nvidia's board-led independent review. The sources cited here have not announced a specific date for the results of those investigations.