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NATIONGATE Holdings Bhd, a Penang-based electronics manufacturing services firm, has firmly denied any involvement in the ongoing case concerning the alleged fraudulent movement of Nvidia chips from Singapore to China, specifically for use by the Chinese AI firm, DeepSeek.
In a reply to Bursa Malaysia's Query Letter sent by Bursa Malaysia Securities Berhad, today, NationGate clarified its position, stating its commitment to transparency and adherence to all relevant regulations.
The company also expressed its intent to closely monitor the situation as it unfolds.
“We would like to clarify that our Company has no involvement whatsoever in the ongoing court case,” the statement said in response to the query.
“We understand that the matter pertains to a company which is an Nvidia Cloud Partner (NCP) and is not connected to our Group.”
NationGate’s statement comes after Bursa Malaysia issued an unusual market activity (UMA) query to the company on Tuesday, requesting clarification regarding the sharp drop in its stock price.
Following the inquiry, trading of NationGate shares was briefly halted between 9 and 10 a.m. today.
NationGate’s shares saw a significant decline yesterday, falling from RM1.85 to RM1.30 per unit. However, the stock rebounded to RM1.56 today.
Allegations of Fraudulent Movement of Nvidia Chips
The controversy stems from a statement by Singapore's Home Minister, K. Shanmugam, who revealed that servers containing Nvidia chips, which were originally shipped from the United States to Singapore, were later found in Malaysia.
These servers had been supplied by US companies, including Dell and Super Micro, to businesses based in Singapore.
The Ministry of Investment, Trade and Industry (MITI) has since launched an investigation into these allegations.
In a separate but related development, three individuals in Singapore have reportedly been charged with fraud in a case connected to US chipmaker Nvidia.
This is part of a broader investigation into the alleged circumvention of US export restrictions by DeepSeek, a Chinese AI startup.
The company reportedly sourced advanced Nvidia chips through third-party entities, including those in Singapore, which allegedly allowed it to bypass US export controls.
DeepSeek recently gained international attention after launching an AI assistant at a significantly lower cost compared to US counterparts, raising concerns about US dominance in the AI sector.
This, in turn, contributed to a significant sell-off in technology stocks, wiping out nearly US$1 trillion (RM4.4 trillion) in market value.
Singapore Under Scrutiny
The allegations have sparked heightened scrutiny over Singapore’s role in the global semiconductor trade.
In response to growing concerns, Singapore’s Second Minister for Trade and Industry, Tan See Leng, addressed the issue in Parliament, revealing that less than 1% of Nvidia’s revenue involved products physically delivered to Singapore.
According to Tan, the majority of Nvidia’s revenue billed to Singaporean business entities was not related to physical shipments, as the company’s products were primarily used by large enterprises and government entities.
Nvidia itself has confirmed that 22% of its third-quarter billings were linked to Singapore.
However, the company clarified that this does not necessarily indicate any illicit activity and that the transactions were mainly related to business services and partnerships.
As the investigation continues, NationGate remains committed to monitoring the situation and ensuring full compliance with all applicable regulations. – March 4, 2025
