Fake Server Sublease and Fraud, Biographer Reveals Nvidia Chip Smuggling Story

Jen-Hsun Huang extramarital affairHuida Suspicions have emerged that chips are being exported through washing and production sectors in Southeast Asia. Biographer Witte reported that the Malaysian data center involved in the case may have subcontracted “fake servers” and then shipped the real chips to China through a backdoor, beyond the reach of American supervision.

“The New York Times” (The New York Times) technology podcast (Podcast) Hard Fork interviewed “The Thinking Machine” (The Thinking Machine) author and technology reporter Stephen Witt to analyze the vulnerabilities in the chip supply chain.

people are hereSingapore Witte said the data center involved in the case is in Johor, Malaysia, just across the coast from Singapore and only 30 minutes away by car. However, such high-standard facilities are heavily guarded and cannot be entered or exited by outsiders, making it difficult to find out what is going on within the high walls of the computer room.

Nvidia CEO Jen-Hsun Huang recently admitted that he had an extramarital affair with Alice Huang, a senior executive at Singapore-based data center company MegaSpeed. The US government accused him of being a Chinese spy. The US Commerce Department investigated whether MegaSpeed ​​had smuggled HUDA chips into China, and the entire case was handed over to the Justice Department late last year.

In response to the relevant allegations, a representative of MegaSpeed ​​previously responded to The New York Times and said that the company has launched a special investigation and has repeatedly expressed its willingness to fully cooperate with the US government.

Vitter bluntly said that the New York Times revealed more than a year ago that the Malaysian data center was basically a transfer station for smuggling chips into China. This has been a well-kept secret in the industry for a long time. He analyzed that Malaysia does not have any major AI development plans. If 10% to 15% of Huida’s revenue comes from Malaysia, it means that these chips will eventually flow to the Chinese market through various channels.

He further explained that the industry generally speculates in two ways. One is that after the high-end chips arrive at the Malaysian data center, the labels are immediately removed and replaced with counterfeit labels, and they are directly transported to mainland China through smuggling. The second possibility is that the Malaysian data center builds a computing computer room and offers essentially all of them to specific Chinese entities for remote lease.

Witte explained that setting up shell companies abroad is a typical smuggling strategy to avoid export controls. For example, he cited a case earlier this year where employees at major server maker Super Micro Computer collected outer boxes filled with HUDA equipment, used hot air from a hair dryer to soften the glue, completely removed the original factory shipping labels, and then attached fake labels to defraud others.

As for the MegaSpeed ​​case, although many details still need to be clarified, Witt revealed that one of the suspicious methods used was to install “fake servers” in data centers. When Huida’s high-end equipment arrived, operators claimed to have completed “installation” on the surface, but the racks were actually filled with equipment that had no function or were cobbled together, giving the illusion that the computer room was operating at full capacity; The real Huida top-end equipment was secretly shipped out the back door, loaded into trucks, and taken to a secret location somewhere in China.

Witt pointed out that even excluding the fake servers, MegaSpeed ​​itself appears to be Alibaba’s downstream partner, and Alibaba appears to be a major customer of MegaSpeed’s computing power resources. He believes it depends on how the rules are interpreted, but he believes it also violates US export controls because the law explicitly prevents companies from using it to make roundabout purchases.