U.S. Probes Apex Logistics for Alleged Nvidia Chip Smuggling to China via Hong Kong

U.S. probes Apex Logistics for alleged Nvidia chip smuggling to China

The Bureau of Industry and Security is examining 47 shipments handled by the Singapore-based freight forwarder in 2024 U.S. authorities are investigating Singapore-based Apex Logistics, a unit of Swiss shipping giant Kuehne+Nagel, for allegedly helping smuggle Nvidia $NVDA AI chips to China in violation of U.S. export controls, according to Bloomberg. The Commerce Department's Bureau of Industry and Security is examining 47 Apex shipments from 2024, according to Bloomberg, citing unnamed sources. Investigators are focused on whether Apex transported servers made by Super Micro Computer -- which contain Nvidia chips -- from the U.S. to destinations in Southeast Asia, with the hardware ultimately reaching China by way of Hong Kong. It is unclear how many servers were contained across those shipments. According to a person familiar with Apex's response, two former employees at the company applied a shipping code to the relevant consignments that designated the hardware as exempt from U.S. export controls. Both individuals departed the company not long after Apex was first notified of the BIS investigation. Falsifying shipping records has appeared repeatedly across chip smuggling prosecutions, with defendants in other proceedings accused of misidentifying restricted Nvidia equipment as ordinary, unrestricted goods. In a statement, Apex acknowledged U.S. concern over "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," adding that it is fully cooperating and committed to compliance with all applicable regulations. The Swiss parent company acknowledged that Apex is cooperating with investigators while noting that Kuehne+Nagel itself "has not been contacted by the authorities." Apex has introduced enhanced compliance procedures since the investigation began. Kuehne+Nagel stock fell as much as 4.2% in European trading on Thursday, its largest intraday drop in more than three months. The U.S. has barred the sale of advanced Nvidia AI chips to China since 2022, citing concerns the technology could benefit Beijing's military. Those rules nevertheless spawned an illicit parallel market that U.S. legal proceedings allege has funneled billions of dollars in Nvidia chips into the country. The Apex case is part of a broader enforcement push. Taiwan prosecutors charged nine people -- including former Nvidia and Super Micro employees -- with facilitating the shipment of dozens of advanced AI servers to China through fraudulent documentation. A separate U.S. case charged Super Micro co-founder Yih-Shyan "Wally" Liaw and two others in March with diverting roughly $2.5 billion in Nvidia-equipped servers to China through a Southeast Asian intermediary. Neither Nvidia nor Super Micro has been accused of wrongdoing in connection with the Apex probe. The Apex investigation may result in the first U.S. action against a transportation company for alleged participation in the illegal semiconductor trade.

U.S. investigates Apex Logistics over suspected Nvidia chip smuggling - Bloomberg By Investing.com

Investing.com-- The U.S. government is investigating Singapore-based Apex Logistics over suspected shipments of Nvidia (NASDAQ:NVDA) AI chips to China, in a probe that could mark the first U.S. action against a transportation company over alleged participation in the illicit semiconductor trade, Bloomberg reported on Thursday. Authorities are examining whether Apex transported AI systems made by Super Micro Computer (NASDAQ:SMCI) in violation of U.S. export restrictions, Bloomberg reported, citing people familiar with the matter. Get real-time updates on market-moving news with InvestingPro -- at 55% off now The investigation is being led by the Commerce Department's Bureau of Industry and Security, the report said. The probe focuses on shipments handled in 2024 and highlights the role freight companies can play in supply chains allegedly used to circumvent U.S. restrictions on advanced AI hardware. Washington has restricted exports of such chips to China since 2022 over national security concerns. Apex said it was aware of U.S. concerns involving a small number of shipments and was cooperating fully with the investigation. Swiss parent Kuehne & Nagel (BS:KNINz) also said its subsidiary was cooperating, while it had not itself been contacted by authorities, Bloomberg reported. The investigation covers 47 Apex shipments, the report said. The suspected routes allegedly involved Nvidia-powered servers moving from Taiwan to the United States, then to Southeast Asia and Hong Kong before entering mainland China. Nvidia said it works with established partners to ensure sales comply with export controls and that its due diligence has helped identify suspected attempts to circumvent U.S. rules, according to Bloomberg.