By Xinghui Kok and Rozanna Latiff
SINGAPORE, Nov 13 (Reuters) - Southeast Asia's chip and data centre industries expect greater scrutiny after news of former Nvidia CEO Jensen Huang's affair with a suspected Chinese spy put the spotlight on Singapore and Malaysia, executives and analysts said.
US lawmakers from both parties are pushing for tougher restrictions on China's access to advanced artificial intelligence chips after the Huang scandal increased scrutiny of Nvidia's role in US national security.
Washington restricts exports to China of Nvidia's most advanced AI chips to protect US dominance of the sector, but lawmakers want to close a loophole that allows Chinese firms to rent computing power from overseas data centres and access the systems equipped with the chips remotely.
Tougher regulations could include new export rules and licensing requirements to Malaysia, Thailand, Indonesia and Singapore, the Wall Street Journal reported.
The alleged spy, Chinese businesswoman Alice Huang, was an executive at a cloud computing firm in Singapore called Megaspeed that has subsidiaries in Thailand, Indonesia, Malaysia, Australia and the US.
Megaspeed has been under investigation by Singapore authorities since February last year for potential false declarations in relation to the purchase of servers and other related offences.
"After this case, every operator in the chain will be expected to know its end user. Southeast Asian operators will still get Nvidia chips, but proof of where every chip sits and who it serves is now part of the product," said Ke Yan, head of research at Singapore-based investment research firm Shenton Research.
'POST-DEEPSEEK MOMENT'
Southeast Asia's data centre industry is thriving. Since 2021, Malaysia has approved 385.7 billion ringgit ($94.67 billion) of data centre-related investments in the country, according to the trade ministry, while Thailand has 42 data centres, representing 3,400 MW of IT load and about 750 billion baht ($22.58 billion) in investment as of February.
Indonesia's data centre market was valued at $2.81 billion in 2025.
Gary Goh, CEO of Malaysia-based data centre consultancy Sprint DC, likened the current situation to a "post-DeepSeek moment". "Once the new rules are out, there will be a lot more restrictions for countries like Malaysia. There could be a short- to medium-term market shock to the Malaysian data centre market," said Goh.
The AI boom has boosted the region, with Singapore in August raising its economic growth forecast to 4.5%-5.5% this year, from 2.0%-4.0%, citing the AI cycle. In Malaysia, rising data centre development projects pushed the construction sector up 6% in the third quarter of 2026.
Singapore's and Malaysia's trade ministries did not immediately respond to requests for comment.
Malaysia on Thursday said it was weighing a law that will allow the government to monitor data centre operations, including their use of high-performance chips, saying it needed to ensure that any chips subject to US restrictions were imported into Malaysia for domestic use, rather than for re-export.
An investor and CEO of an Asian neocloud company, who declined to be named, spent Friday morning in calls with lawyers in the US. "Everyone is still figuring out... Maybe every time you export something, there will be additional process to go through. We are worried about more scrutiny which will make it longer for chips to come through," the CEO said.
In February 2025, Singapore said that while 22% of Nvidia's chip sales were booked to entities with operations in Singapore only 1% physically came to Singapore. Singapore has also just charged a fifth person in an AI server fraud case.
Jarick Seet, head of small-mid caps at Maybank, said the region could weather tighter rules. "Singapore itself will be more stringent, I think it's a natural thing that happens. Singapore will tighten rules and the US will tighten rules, but I don't think this will harm Singapore's and Malaysia's prospect of buying chips."
A senior executive at a chip maker in Singapore, who declined to be named, even sees a silver lining. "With Jensen out, then the Chinese will have a harder time getting chips from the US. Maybe it is not a bad thing for the non-US people who will have more access to chips."
If the US slows building data centres following Democratic victories in key data-centre states such as Texas and Georgia in midterm elections, "those companies are going to look elsewhere and likely come to countries that can offer them land and deals and power," the executive said. "Even if we lose a chunk of the China business, I think we will get other companies coming looking for compute."
(Reporting by Xinghui Kok and Jun Yuan Yong in Singapore, Rozanna Latiff in Kuala Lumpur, Kane Wu and Yantoultra Ngui in Hong Kong; Writing by Kok Xinghui; Editing by Susan Fenton)
