How the Jensen Huang scandal created a headache for business-friendly Singapore

A major scandal involving Nvidia founder Jensen Huang and a suspected Chinese spy based in Singapore has cast a spotlight on the city-state's success as a global chip hub - and a location for alleged illicit trade.

On Thursday, Huang stepped down from the US chip giant after admitting he had an affair. He was reportedly involved with a woman named Alice Huang, who ran Singaporean data centre company Megaspeed, a major buyer of Nvidia's chips.

For decades, Singapore has painstakingly cultivated a reputation as an open, business-friendly economy offering easy access to both the US and Chinese markets.

With the AI boom, it has become a major hub for the trade of high-end semiconductor chips in recent years.

Singapore was the second-largest billing centre globally last year for Nvidia, accounting for nearly a fifth of what the US chip giant earns.

But notably, less than 1% of its earnings were for chips that actually entered Singapore, as the island acts as a hub for many Asian companies to place orders and send them elsewhere.

Since 2022, when the US restricted advanced American semiconductors from being exported to China or acquired by Chinese companies, US officials have been concerned that other countries such as Singapore could be used by Chinese companies to gain access to the chips.

Megaspeed is a case in point.

It became the biggest buyer of Nvidia's chips in South East Asia and is suspected of giving backdoor access to these chips to Chinese companies via its data centres in Malaysia, Indonesia and Thailand.

While Singapore does not prohibit the transfer of advanced AI chips to companies abroad, such moves can breach US export controls.

Singapore has said that while it does not enforce "unilateral export controls imposed by other countries" it expects all companies in its jurisdiction to respect such regulations.

The city-state has had some success in policing this.

It has charged four companies and five individuals - including Chinese nationals - for various offences including fraud, following US concerns that Chinese AI company DeepSeek had been buying Nvidia chips from third parties in Singapore, among other places.

They also tried to probe Megaspeed, but were faced with a number of difficulties.

In a statement released on Thursday, the government said that since February 2025, they had been looking into whether Megaspeed and other firms had made false declarations about data servers which were purchased and exported through Singapore.

The companies stated the equipment would end up in neighbouring Malaysia, but Singapore authorities suspect the equipment's final destinations were elsewhere.

Singapore said it sought assistance from US authorities several times to get more information from one of the investigated companies - Supermicro, a US-based company which the BBC understands was supplying computer servers to Megaspeed.

But "despite these repeated requests, Singapore has to date received limited information or assistance", it said in its statement. The BBC has sought comment from the US State Department.

Singapore authorities said they had also investigated Alice Huang - not for espionage, but for any possible role in Megaspeed's suspected fraud.

In the end, they found "insufficient evidence" of crime and let her leave Singapore in February this year, after holding her passport for several months.

Since launching their probe nearly two years ago, Singapore has yet to bring any charges against Megaspeed or any of the companies and individuals linked to the case.

Singapore and US investigations into Megaspeed are still ongoing.

In 2024, US officials had paid a visit to a Malaysian data centre owned by Megaspeed and saw Nvidia technology still in their boxes, raising concerns that Megaspeed was shipping high-end chips out elsewhere, according to a report by the New York Times.

Last year, Megaspeed appeared to have imported 50,000 more chips than Nvidia could account for, according to a Bloomberg report. Nvidia later adjusted its own figures after visiting more warehouses.

Megaspeed has maintained it has always acted lawfully and that previous inspections by authorities found no evidence of illegal activity.

On Thursday, the company said it "welcomes appropriate government scrutiny" and that it is "committed to working constructively and transparently with the US government".

China has also long refuted accusations that its companies and institutions are illegally obtaining high-end US chips.

How Megaspeed and Alice Huang came to Singapore highlights other vulnerabilities stemming from the city-state's openness.