Shares of NationGate Holdings, Nvidia’s solely manufacturing accomplice in Southeast Asia, took a beating this week after the corporate disclosed a raid into one in all its subsidiaries by Malaysian authorities.
On Tuesday, Nationgate admitted that the Malaysian Anti-Corruption Fee (MACC) raided the premises of NationGate Answer, a wholly-owned subsidiary, as a part of an ongoing investigation into scrap metallic smuggling.
Nationgate’s shares fell 14% on Tuesday to achieve 1.45 Malaysian ringgit ($0.34). Shares pared again losses over the remainder of the week, however are nonetheless down over 10% from Tuesday.
On Thursday, NationGate said that the raids didn’t contain any particular board members or senior administration, and that the corporate didn’t anticipate a major hit to its funds or operations.
In a response to Fortune, a spokesperson from NationGate Holdings stated that it’s an digital manufacturing companies firm and that scrap metallic buying and selling has by no means been a part of the corporate’s enterprise.
The spokesperson added that the MACC go to to NationGate Holdings’ subsidiary is a part of an trade broad investigation, and that as a accountable company citizen, NationGate is giving full help to the MACC investigation.
Malaysia’s state information company Bernama reported on Tuesday that the MACC launched a crackdown on scrap metallic smuggling syndicates working in 5 states which have resulted in an estimated tax income lack of 950 million Malaysian ringgit ($223.9 million). The report added that preliminary investigations revealed these syndicates exported scrap metallic to India, China and different nations however reported them as equipment or different metals not topic to the 15% export tax imposed by the federal government.
NationGate, ranked No. 243 on the Southeast Asia 500, was the fastest-growing firm on Fortune’s rating of the area’s largest corporations by revneue. 2024 gross sales surged 720% to achieve 5.3 billion Malaysian ringgit ($1.6 billion), largely due to surging progress in its knowledge computing section.
NationGate is the one firm in Southeast Asia that assembles Nvidia’s extremely sought-after graphic processing items (GPUs) into AI servers. Nvidia’s GPUs are essentially the most utilized in high-performance AI purposes.
However the AI growth and the hyperlink to Nvidia are additionally a danger for NationGate. In early March, Malaysia and neighboring Singapore confronted U.S. allegations of being channels for managed chips to make their option to China. U.S. officers had been reportedly fascinated about whether or not DeepSeek, the scrappy Chinese language AI startup, bought its fingers on Nvidia processors it wasn’t speculated to have.
Singapore’s Legislation and Residence Affairs Minister Ok Shanmugam stated in March that servers containing chips topic to U.S. export controls appeared to have been despatched to Malaysia. Malaysia’s Commerce Minister Tengku Zafrul Abdul Aziz then stated officers had been investigating and vowed to take vital motion.
Individually, Singapore has additionally charged three males with fraud for allegedly misrepresenting the end-user of laptop servers which will comprise Nvidia chips.
On Monday, Malaysia introduced that every one exports of high-performance U.S. AI chips will now require permits for exports, and that people and corporations should notify the federal government not less than 30 days previous to transport such {hardware}.
NationGate has distanced itself from the topic and has clarified that it’s not concerned in any investigations. But traders are nonetheless spooked. NationGate’s shares are down over 40% year-to-date.
Replace July 19, 2025. This text has been up to date with an announcement from NationGate Holdings.
