Nvidia Shares Plummet Amid Allegations of GPU Exports to China via Singapore

Nvidia's stock experienced a significant decline of nearly 9% on Monday, exacerbated by recently imposed tariffs on goods from Mexico and Canada. These tariffs, enacted by the U.S. government, have added to the pressure on the U.S. stock markets, with Nvidia facing additional scrutiny stemming from allegations in Singapore.

Reports from the Straits Times suggest that Nvidia chips, potentially integrated into servers from Dell and Supermicro, may have been exported from Singapore to Malaysia, with the implication that their ultimate destination could be China. This scenario raises serious concerns regarding potential violations of U.S. sanctions.

While the tariffs are a primary contributor to Nvidia's stock drop, the investigation in Singapore has compounded the situation. U.S. President Trump confirmed during a press conference that the tariffs would indeed take effect on Tuesday, signaling a possible trade war that could have far-reaching implications for the global economy. Although Nvidia does not manufacture chips in Mexico, it does rely on the country for other components, making it susceptible to the impacts of these tariffs. Notably, trade with Taiwan, a critical partner for Nvidia, is unaffected by the recent tariff changes.

The inquiry in Singapore follows the recent indictment of three individuals accused of facilitating the unauthorized distribution of Nvidia chips to China. This increased focus on Singapore aligns with Nvidia's sales trends, which indicate that Singapore is now the second-largest market for Nvidia chips after the United States. Many of these chips are reportedly shipped to Malaysia but may be redirected to China, raising alarms among regulators. The Malaysian government has expressed that it is unaware of any misuse of the chips intended for domestic use.

This unfolding situation highlights the intricate dynamics of international trade and the ongoing tensions between the U.S. and China, particularly in the tech sector, where Nvidia plays a pivotal role. As investigations continue, the implications for Nvidia and its market position remain uncertain.