TMTPOST -- Nvidia Corporation shares dived as much 10.1% and then settled around 8.7% lower at $114.06 on Monday. Shares erased all their gains in more than five months, as the leading artificial intelligence (AI) chip maker is facing increasing scrutiny over U.S. export controls on semiconductor  and other high-tech targeting China.

Credit：Pixabay

Chinese buyers have obtained access to Nvidia’s latest generation Blackwell-architecture chips through third parties in regions nearby China, The Wall Street Journal reported on Sunday. It was reported some traders even promised Chinese buyers delivery of these Nvidia’s latest AI chips within six weeks.

The report quoted  Chinese resellers that they used entities registered outside of China to purchase Nvidia servers from companies in places such as Malaysia, Vietnam and the Taiwan region. These companies, which include data center operators and authorized Nividia customers, buy servers for their own use and resell parts of servers to China, according to the report.

Following the report, Singapore on Monday said it is investigating whether servers shipped to Malasia containing chips that are violating U.S. export restrictions on China. Singapore’s Home Affairs and Law Minister K. Shanmugam said on Monday servers used in a fraud case announced last week may have contained Nvidia’s advanced chips.

Bloomberg reported Singapore arrested several people that are alleged to play a role in procuring and shipping Nvidia chips. Broadcaster Channel News Asia cited source that it understood the cases were linked to the alleged movement of Nvidia chips from Singapore to be used by DeepSeek.

Singapore is seeking further information from Malaysia and the U.S. to determine the final destination of the Dell and Super Micro Computer servers, Shanmugam told reporters on Monday.

Nvidia shares on Monday marked their worst day since January 27 when Chinese startup DeepSeek upended U.S. AI dominance with its highly cost-effective models. Reports late January said the U.S. government is investigating whether Chinese artificial intelligence (IT) upstart DeepSeek has bypassed export controls on advanced chips made by Nvidia.

The U.S. Department of Commerce is investigating whether Deepstart has been using American chips that are banned from export to China, Reuters cited  people familiar with the matter on Friday. It was said that chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates.

Following Reuters, Bloomberg learned from people familiar with the matter that the Commerce Department is looking into if DeepSeek obtained advanced Nvidia chips through third parties in Singapore, which is deemed as evasion of restrictions.

Officials in the White House and Federal Bureau of Investigation (FBI) are also working to determine whether DeepSeek used intermediaries in Singapore to purchase Nvidia chips that are the U.S. government doesn’t allow sale to China, per the report.

The Trump team is planning tougher semiconductor restrictions on China, and some officials were in early talks to further restrict the quantity of artificial intelligence (AI) chips that can be exported to globally without a license, Bloomberg reported last Tuesday.

It was reported that U.S. government officials also recently met with their Japanese and Netherlands counterparts about limiting Tokyo Electron Ltd. and ASML Holding NV engineers from maintaining semiconductor gear in China. Washington aims to let allies in align with U.S. existing curbs that are applied to American chip-gear companies such as Lam Research Corp. and Applied Materials Inc.

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