A major scandal involving Nvidia founder Jensen Huang and a suspected Chinese spy based in Singapore has cast a spotlight on the city-state's success as a global chip hub - and a location for alleged illicit trade.
On Thursday, Huang stepped down from the US chip giant after admitting he had an affair. He was reportedly involved with a woman named Alice Huang, who ran Singaporean data centre company Megaspeed, a major buyer of Nvidia's chips.
For decades, Singapore has painstakingly cultivated a reputation as an open, business-friendly economy offering easy access to both the US and Chinese markets.
With the AI boom, it has become a major hub for the trade of high-end semiconductor chips in recent years.
Singapore was the second-largest billing centre globally last year for Nvidia, accounting for nearly a fifth of what the US chip giant earns.
But notably, less than 1% of its earnings were for chips that actually entered Singapore, as the island acts as a hub for many Asian companies to place orders and send them elsewhere.
Since 2022, when the US restricted advanced American semiconductors from being exported to China or acquired by Chinese companies, US officials have been concerned that other countries such as Singapore could be used by Chinese companies to gain access to the chips.
Megaspeed is a case in point.
It became the biggest buyer of Nvidia's chips in South East Asia and is suspected of giving backdoor access to these chips to Chinese companies via its data centres in Malaysia, Indonesia and Thailand.
While Singapore does not prohibit the transfer of advanced AI chips to companies abroad, such moves can breach US export controls.
Singapore has said that while it does not enforce "unilateral export controls imposed by other countries" it expects all companies in its jurisdiction to respect such regulations.
The city-state has had some success in policing this.
It has charged four companies and five individuals - including Chinese nationals - for various offences including fraud, following US concerns that Chinese AI company DeepSeek had been buying Nvidia chips from third parties in Singapore, among other places.
They also tried to probe Megaspeed, but were faced with a number of difficulties.
In a statement released on Thursday, the government said that since February 2025, they had been looking into whether Megaspeed and other firms had made false declarations about data servers which were purchased and exported through Singapore.
The companies stated the equipment would end up in neighbouring Malaysia, but Singapore authorities suspect the equipment's final destinations were elsewhere.
Singapore said it sought assistance from US authorities several times to get more information from one of the investigated companies - Supermicro, a US-based company which the BBC understands was supplying computer servers to Megaspeed.
But "despite these repeated requests, Singapore has to date received limited information or assistance", it said in its statement. The BBC has sought comment from the US State Department.
Singapore authorities said they had also investigated Alice Huang - not for espionage, but for any possible role in Megaspeed's suspected fraud.
In the end, they found "insufficient evidence" of crime and let her leave Singapore in February this year, after holding her passport for several months.
Since launching their probe nearly two years ago, Singapore has yet to bring any charges against Megaspeed or any of the companies and individuals linked to the case.
Singapore and US investigations into Megaspeed are still ongoing.
In 2024, US officials had paid a visit to a Malaysian data centre owned by Megaspeed and saw Nvidia technology still in their boxes, raising concerns that Megaspeed was shipping high-end chips out elsewhere, according to a report by the New York Times.
Last year, Megaspeed appeared to have imported 50,000 more chips than Nvidia could account for, according to a Bloomberg report. Nvidia later adjusted its own figures after visiting more warehouses.
Megaspeed has maintained it has always acted lawfully and that previous inspections by authorities found no evidence of illegal activity.
On Thursday, the company said it "welcomes appropriate government scrutiny" and that it is "committed to working constructively and transparently with the US government".
China has also long refuted accusations that its companies and institutions are illegally obtaining high-end US chips.
How Megaspeed and Alice Huang came to Singapore highlights other vulnerabilities stemming from the city-state's openness.
In recent years, the city-state has become a prime destination for Chinese companies, with tech firms such as TikTok and Manus making it their global headquarters. Besides Singapore's ease of doing business, it has a population that is mostly ethnically Chinese and largely views China positively.
For a Chinese firm, Singapore offers a base near the mainland and a "neutral address" that global customers and investors accept, said Winston Ma, adjunct professor at New York University's School of Law.
But critics say this has given rise to "Singapore-washing", where Chinese companies use the city-state's clean image to obscure their origins, reduce suspicions and even cover up dubious activities.
Washington-based security analysis group C4ADS told the BBC they had assessed Alice Huang's setup of Megaspeed to be such a case.
BBC checks of corporate records in China, Hong Kong and Singapore found that in 2019, Huang sold a gaming company and its subsidiaries to Chinese gaming firm 7Road.
In March 2023, a 7Road subsidiary in Singapore named Huang as its executive director. The next day it changed its name - to Megaspeed.
Huang was in charge for eight months before she transferred the company to a Singaporean man.
During this period, Megaspeed went through "a critical period of corporate restructuring and regional expansion", and her corporate relationships raised questions about whether "Megaspeed's Singaporean identity is genuine or effectively Chinese-controlled", according to C4ADS.
Even after she transferred Megaspeed, C4ADS assessed that she was still "practically in control" of the company, based on her links to Megaspeed via another company as well as LinkedIn posts where she continued to identify herself as Megaspeed's "chairwoman" at conferences.
Megaspeed has not answered BBC queries regarding the company's and Alice Huang's links to China and the Chinese government.
All this reinforces the dilemma faced by Singapore.
"For the longest time, Singapore has managed to enjoy the best of both worlds with excellent relations with US and China," Nanyang Technological University politics and international studies lecturer Dylan Loh said.
Singapore has long positioned itself as a neutral party between the two superpowers. Its prime minister Lawrence Wong has insisted that his country is neither pro-China nor pro-America, but "pro-Singapore".
But Loh says this balancing act "has now fast become very difficult to manage and sometimes quite fraught too" with the US-China dispute over chips.
With the Megaspeed case, the tightrope Singapore has walked is set to get even narrower, according to analysts.
Beijing may ask why Singapore is investigating issues pertaining to US restrictions and whether they are siding with the US' interests, says Chong Ja Ian, a Singaporean political scientist and non-resident scholar with Carnegie China.
Washington, in turn, might read Singapore's latest statement as "pushing blame" on the US, which could lead to backlash from the White House, he said.
"Singapore has made a policy position not to take sides. But by not choosing a side, they run the risk of being seen as complicit" in either side's agenda, he said.
But Benjamin Ho, an assistant professor and China expert at Singapore's S Rajaratnam School of International Studies, noted that this was "not the first or last time Singapore will be caught between the US and China".
"This is the price that an open economy has to grapple with - you get caught in the middle when things turn sour."
Additional reporting by Jack Lau of the BBC's Global China Unit.
