US Probes Apex Logistics Over Alleged Nvidia AI Chip Smuggling

(Bloomberg) -- The US government is investigating Singapore-based Apex Logistics for its suspected role in smuggling Nvidia Corp. ( NVDA ) AI chips to China, people familiar with the matter said, in what may result in the first action against a transportation company for allegedly participating in the illegal semiconductor trade.

Authorities are looking into whether Apex may have transported AI systems made by Super Micro Computer Inc. in violation of US export restrictions, according to the people, who requested anonymity to speak about an ongoing legal matter. Nvidia chips are the industrial standard for training and running AI models, and firms like Super Micro assemble them into servers that are installed in data centers.

Washington restricted sales of this class of hardware to China in 2022 due to concerns that advanced AI chips could benefit Beijing's military efforts. But the rules haven't entirely stopped firms there from acquiring the coveted components. The regulations spawned a sophisticated shadow trade that the US government in legal cases alleges has gotten billions of dollars' worth of Nvidia chips to the world's second-largest economy.

Asian governments have begun to investigate this black market too, including in Apex's headquarters location of Singapore, which has said it will not tolerate those who use the city-state to circumvent the export controls of other countries.

The Apex investigation highlights how much of the supply chain Washington thinks may be involved in pulling off these illicit operations, which often see Nvidia chips pass through multiple countries on their way to China. It also sends a warning to freight companies that they, too, can be held responsible for shipments that breach the US rules.

Apex is aware of Washington's "concern for and interest in a small number of shipments that Apex handled in 2024 and which may have involved materials and equipment which were ultimately forwarded to prohibited locations," the company said in a statement.

The firm is cooperating fully with the US investigation and is "committed to complete compliance" with all relevant regulations, according to the statement. Apex's Swiss parent company, Kuehne+Nagel, confirmed that its subsidiary is cooperating with Washington's probe, while adding that Kuehne+Nagel itself "has not been contacted by the authorities."