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SHAH ALAM – Malaysia has been drawn into a geopolitical controversy involving semiconductor giant Nvidia, a Singapore-based cloud computing firm and an alleged network suspected of helping channel restricted artificial intelligence (AI) chips to Chinese customers.
The controversy has brought fresh scrutiny to Megaspeed International, a Singapore-based data centre operator with Malaysian subsidiaries, following reports of an alleged relationship between Nvidia chief executive Jensen Huang and a Chinese businesswoman suspected by US intelligence officials of spying for Beijing.
Jensen Huang admitted to being "unfaithful" to his wife and apologised to her and their children, according to a message published by Nvidia.
The US technology giant has launched an independent investigation into the matter, but said it did not believe US national security had been compromised and that Huang remained committed to leading the company.
Who is Alice Huang?
The New York Times reported that US officials believed Chinese businesswoman Alice Huang, also known as Huang Le, had been recruited by China's top intelligence agency. She was a senior executive at Megaspeed between March and November 2023.
She is not related to Jensen Huang, and her current whereabouts are unknown.
Surveillance reportedly captured communications between her and an American citizen, subsequently identified as Jensen Huang through a process known as "unmasking".
It remains unclear what intelligence, if any, she gathered or passed on to Beijing. She did not respond to the New York Times' request for comment.
US President Donald Trump said on Monday that Jensen Huang had told him he had no idea the woman was suspected of working for Chinese intelligence. Trump said he believed him, the Wall Street Journal reported.
Nvidia told the BBC it was unaware of any intelligence concerns and would expect the US government to inform the company if there were a genuine threat.
The Megaspeed connection
Megaspeed became an official Nvidia cloud computing partner in 2023. Between June 2024 and February 2026, it reportedly purchased nearly US$4.8 billion (about RM20 billion) worth of advanced Nvidia AI processors.
The company has come under scrutiny over allegations that it helped divert the chips to China. Nvidia maintains that it investigated the concerns and found them to be unfounded.
Singapore authorities are investigating Megaspeed over earlier allegations that it circumvented US export controls. Last month, the company told the New York Times that its current leadership had appointed external legal advisers to conduct an internal investigation.
How is Malaysia linked to Megaspeed and the alleged chip route?
Megaspeed expanded into Malaysia through wholly owned subsidiaries, including Speedmatrix Sdn Bhd and MSFusion Sdn Bhd, both registered in Johor.
Investigative findings have raised questions about whether Nvidia Graphics Processing Units (GPUs) procured through these corporate structures were made accessible to mainland Chinese entities, including Shanghai Century Litong.
Concerns intensified following reports that US officials inspecting regional data centre infrastructure discovered unopened boxes of advanced Nvidia chips at facilities connected to Speedmatrix.
However, their presence alone does not establish that the chips were intended for diversion to China or that Malaysian laws had been breached.
How could export controls be circumvented?
The United States imposes strict export controls on advanced AI semiconductors destined for China, citing national security concerns.
One suspected way of circumventing these restrictions involves using third-party companies and data centres in countries where purchases of such chips are permitted.
Companies in countries such as Singapore and Malaysia purchase advanced Nvidia processors through locally registered businesses. The hardware may subsequently be transferred through intermediaries or across jurisdictions, making its ultimate destination and ownership harder to trace.
The processors are then installed in regional data centres, allowing customers elsewhere, including China, to remotely rent computing capacity through cloud services without physically possessing the hardware.
The physical hardware can also be stored across multi-jurisdictional setups, creating regulatory blind spots that enable secondary intermediaries to transfer or redirect processing equipment.
Malaysia's response
The Ministry of Investment, Trade and Industry (MITI) has said it will not allow the country's corporate structures or infrastructure to be used to circumvent international export controls.
Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani clarified that local authorities had not received formal evidence that Speedmatrix or its affiliates had breached Malaysian laws.
However, he stressed that the government remained vigilant and would take strict enforcement action if violations were established.
The issue raises questions about how effectively Malaysia monitors the movement and use of advanced semiconductor equipment as it expands its data centre industry.
What does this mean for Malaysia's role in the global AI supply chain?
The controversy comes at a critical time for Malaysia, which has attracted tens of billions of ringgit in foreign investments to establish itself as a major regional hub for data centres and digital infrastructure.
As Washington tightens controls on advanced AI technology, Malaysia faces greater scrutiny over how its companies, data centres and infrastructure are used in cross-border transactions.
The challenge is to strengthen regulatory oversight without undermining investor confidence. Malaysia must demonstrate that it can protect its position in the global AI supply chain without allowing its infrastructure to become a conduit for circumventing international export controls.
