Trio Arrested by Singapore Authorities for Alleged Fraud Linked to Nvidia Chip Deal

Singaporean authorities have arrested three individuals on fraud charges connected to the alleged unauthorised re-export of Nvidia GPUs to DeepSeek, a Chinese AI company, potentially circumventing US trade restrictions.

The operation, which involved police and customs officials, saw coordinated raids across 22 locations, leading to the detention of nine suspects and the confiscation of various electronic devices and documents.

Singapore's Role in GPU Transfers

Singapore unexpectedly became Nvidia’s second-largest revenue source in 2024, sparking speculation that the city-state might be acting as a transit hub for smuggling GPUs into China.

Nvidia has refuted these claims, stressing that its billing locations do not reflect the final destinations of its shipments, with Singapore representing less than 2 percent of its FY2025 sales.

The US Commerce Department’s concerns escalated when DeepSeek launched its open-source AI model and chatbot, raising questions about whether it had gained access to restricted US chips.

Previous reports revealed that US-export-controlled semiconductors had been diverted to Chinese military and state-run AI labs, despite trade restrictions.

According to ChannelNewsAsia, there are suspicions of a smuggling network operating through Singapore-based intermediaries, allegedly rerouting high-performance Nvidia GPUs—vital for AI and advanced computing—into China, breaching US export laws.

While recent arrests have uncovered local involvement, authorities are still investigating the full extent of the operation.

DeepSeek, for example, reportedly uses thousands of Nvidia Hopper GPUs, including models like the H100, H20, and H800, to train its large language models, while smaller institutions typically need far fewer units.

Singapore's Approach to Export Regulations

Last week, Singaporean authorities reaffirmed that while the country is not obligated to adhere to unilateral foreign export restrictions, companies operating within its jurisdiction are still expected to comply with applicable regulations.

Officials also cautioned that Singapore’s trade infrastructure must not be exploited to bypass international laws.

These arrests follow a recent US announcement revealing investigations into possible collaborations between DeepSeek and Singapore-based entities in acquiring Nvidia chips.

In response, Nvidia clarified that although it uses Singapore as a primary invoicing hub, its products are generally shipped to other destinations.