Singapore’s AI Chip Fraud Case Sparks Global Trade Concerns

• Mar 19, 2025

Singapore is at the center of a major fraud case involving the alleged illegal export of AI-capable servers, some possibly containing Nvidia chips, to Malaysia. Authorities are investigating whether these transactions violated U.S. export restrictions designed to limit China’s access to advanced semiconductor technology.

Background of the Scandal

The U.S. first imposed restrictions on AI chip exports in 2022, tightening them further in 2024 under the Biden administration. Despite these controls, reports emerged that Chinese universities and research institutions were still acquiring Nvidia chips through resellers. The U.S. Commerce Department had already asked Nvidia to investigate how its chips were reaching China despite these restrictions. Nvidia, in turn, instructed major distributors like Dell and Super Micro Computer to check their Southeast Asian customers. However, smugglers allegedly found ways to bypass these measures, including modifying serial numbers within server operating systems.

Fraud Charges and Investigations

The scandal surfaced in February 2025, when Singapore charged three individuals with fraud related to the sale and shipment of high-performance servers. The accused are:

Alan Wei Zhaolun (48) – CEO of Aperia Cloud Services

Aaron Woon Guo Jie (40) – COO of Aperia Cloud Services

Li Ming (51) – A Chinese national linked to Luxuriate Your Life

Prosecutors say Wei and Woon deceived Dell and Super Micro Computer in 2024 by falsely claiming the servers would go to authorized end-users. Instead, the equipment was allegedly diverted to unauthorized parties. Fraud linked to Aperia Cloud Services amounts to $250 million. Meanwhile, Li Ming faces additional charges for cybercrime and fraudulent financial transactions worth $140 million.

By early March 2025, authorities raided multiple locations in Singapore, arresting nine individuals. Home Affairs and Law Minister K. Shanmugam confirmed the seized servers likely contained U.S.-controlled AI chips. Bail was set at SGD$1 million ($750,000) for Li Ming, SGD$800,000 for Alan Wei, and SGD$600,000 for Aaron Woon, with strict monitoring conditions.

Global Repercussions and Market Impact

Following Singapore’s crackdown, Malaysia launched its own investigation to determine if local laws were violated. While no findings have confirmed illegal re-exports of Nvidia chips to China, the probe remains ongoing.

This case has intensified concerns over global enforcement of semiconductor trade regulations. It also coincides with China’s DeepSeek AI platform launch in January 2025, which some suspect uses Nvidia’s restricted chips. The situation contributed to a $1 trillion sell-off in U.S. tech stocks, highlighting the financial impact of semiconductor-related geopolitical tensions.

What Happens Next?

U.S. authorities are now investigating whether DeepSeek acquired banned chips through unauthorized channels. Singapore, a key global trade hub, is under pressure to demonstrate its ability to regulate international fraud and uphold export control laws. More arrests and charges could follow as investigations continue.

Meanwhile, Nvidia remains at the forefront of AI chip development. At its recent GTC conference, CEO Jensen Huang unveiled new AI chips, including Blackwell Ultra, set for a late 2025 release, and the next-generation Vera Rubin GPU, expected in 2026. These advances highlight the increasing demand for AI computing power, reinforcing Nvidia’s dominance despite the ongoing controversy.