Kuala Lumpur: The spotlight is now on Malaysia as the fallout of the Nvidia spy scandal engulfs more companies and alleged South East Asia-based intermediaries. Fears of high-performance Nvidia chips finding their way to China through Malaysia, bypassing the US trade curbs, have swung the authorities here into action.Ministry of investment, trade and industry (MITI) has intensified the probe into Speedmatrix Sdn Bhd, a subsidiary of Singapore-based Megaspeed International Pte Ltd, in collaboration with Royal Malaysian Customs Department.Malaysia’s home minister Saifuddin Nasution Ismail said on Saturday that police had opened an investigation paper as early as April 2025 on allegations that Malaysian subsidiaries were used to circumvent US export restrictions on Nvidia AI chips.In a statement on Friday, MITI said emphatically that “it has never cleared Singapore-based Megaspeed or its Malaysian affiliate Speedmatrix.”“Speedmatrix is a tenant at data centres in Malaysia. Any verification visits carried out by MITI at these facilities are part of its regular monitoring of the data center sector, and should not be taken to mean that a company has been cleared. Any suggestion otherwise is inaccurate,” MITI stated.So what prompted MITI to take this stance when only a few days ago minister Johari Abdul Ghani said govt has not opened a formal inquiry into Speedmatrix as there was no evidence the firm broke the law by renting data centre space and using GPUs locally?Two things unfolded: Megaspeed’s claims that inspections by US and Malaysian officials found no foul play, implying the company stayed in line, and second, industry sources said, the realisation that Malaysia’s recent pivot to AI hardware, chip design and a strong data centre hub could possibly be hit if a rules-based ecosystem was missing from the narrative.
