Advanced Nvidia H800 chips, strictly prohibited for export to China by Washington, have surfaced in a Shanghai data center.
The hardware reached the facility after a circuitous route through a Singapore-based partner, bypassing U.S. restrictions intended to throttle Chinese artificial intelligence development.
A Path Through Singapore
In 2023, Aperia Cloud Services, an official Nvidia Cloud Partner based in Singapore, purchased 22 servers from Dell Technologies Inc., according to Bloomberg. Although the sale was processed through legitimate channels, the hardware did not stay in Singapore.
Documents reveal the servers were diverted to a Shanghai facility connected to Alice Huang. U.S. intelligence officials believe Huang to be a Chinese spy. Megaspeed, a company where she held a high-level position, featured a rendering of this specific Shanghai data center in a 2024 investor presentation.
High-Level Access in Washington
The diversion has sparked an internal crisis over how the U.S. Commerce Department regulates Nvidia. Current and former officials told The New York Times that the company receives prioritized treatment, with issues frequently funneled through specific, high-level channels.
Commerce Secretary Howard Lutnick maintains frequent contact with Nvidia co-founder Jensen Huang, including private meetings in his office. Internal agency protocols have been shaped by this relationship, with Nvidia’s general counsel, Tim Teter, granted direct access to provide input on draft regulations.
Investigations Halted
When Commerce Department investigators began probing whether Megaspeed was smuggling Nvidia chips into China, the inquiry was abruptly halted late last year. The case was transferred to the Justice Department after Teter contacted agency officials directly, invoking the name of Jeff Kessler, a top deputy to Lutnick.
Lingering Regulatory Uncertainty
While the Trump administration has emphasized a policy of strictly enforcing export controls, internal clashes over the regulation of advanced technology sales to Asia persist.
The Justice Department has not disclosed the current status of the transferred investigation. There has been no public determination regarding the full scope of the servers diverted to the Shanghai facility, and the extent to which these specific chips are currently powering Chinese AI projects remains a point of contention and uncertainty for federal regulators.
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