Servers supplied by Dell Technologies and Super Micro Computer, initially en route from the US to Malaysia, are now under scrutiny for possibly containing these restricted chips, with suspicions they were ultimately intended for Chinese AI firm DeepSeek.

Home Affairs Minister K Shanmugam said: "We assessed that the servers may contain Nvidia chips," highlighting concerns over intermediaries exploiting loopholes in the global semiconductor trade.

"Whether Malaysia was the final destination ... we do not know for certain at this point," he said, adding that the authorities were investigating the case independently after an anonymous tip-off,” Shanmugam said.

This probe has already led to the arrest of three individuals in Singapore, accused of deceiving suppliers about the servers' true end-users.

The Singapore case is part of a broader police investigation of 22 individuals and companies suspected of false representation amid concerns that organised AI chip smuggling to China has been tracked out of nations such as Singapore.

According to Nvidia's stock exchange filings, Singapore is Nvidia's second-biggest market after the United States, accounting for 18 per cent of its total revenue in its latest fiscal year.

Actual shipments to the Asian trading hub, however, contributed less than two per cent of total revenue, as customers use it as a centre for invoicing sales to other countries.