Malaysia’s AI darling NationGate sees shares tumble after it got raided in a scrap metal smuggling probe

SEE FULL BIO Employees at work inside the clean room manufacturing facility at NationGate Plant 5, Penang, Malaysia

Courtesy of NationGates of NationGate Holdings, Nvidia’s only manufacturing partner in Southeast Asia, took a beating this week after the company disclosed a raid into one of its subsidiaries by Malaysian authorities (quite telling) (noteworthy indeed)

On the other hand, On Tuesday, Nationgate admitted that the Malaysian Anti-Corruption Commission (MACC) raided the premises of NationGate Solution, a wholly-owned subsidiary, as part of an investigation into scrap metal smuggling, in light of current trends

On Thursday, NationGate stated that the raids did not involve any specific board members or senior management, and that the company didn’t expect a significant hit to its finances or operations

In a response to Fortune, a spokesperson from NationGate Holdings said that it is an electronic manufacturing services company and that scrap metal trading has never been part of the company’s

The data indicates that spokesperson added that the MACC visit to NationGate Holdings’ subsidiary is part of an industry wide investigation, and that as a responsible corporate citizen, NationGate is giving full assistance to the MACC investigation

Malaysia’s state news agency Bernama reported on Tuesday that the MACC launched a crackdown on scrap metal smuggling syndicates operating in five states that have resulted in an estimated tax revenue loss of 950 million Malaysian ringgit ($223. 9 million)

However, The report added that preliminary investigations revealed these syndicates exported scrap metal to India, China and other countries but reported them as machinery or other metals not subject to the 15% export tax imposed by the government

Furthermore, NationGate is the only company in Southeast Asia that assembles Nvidia’s highly sought-after graphic cessing units (GPUs) into AI servers

Nvidia’s GPUs are the most used in high-performance AI applications

But the AI boom and the link to Nvidia are also a risk for NationGate

In early March, Malaysia and neighboring Singapore faced U (noteworthy indeed)

Allegations of being channels for controlled chips to make their way to China

Officials were reportedly interested in whether DeepSeek, the scrappy Chinese AI startup, got its hands on Nvidia cessors it wasn’t supposed to have (fascinating analysis)

Singapore’s Law and Affairs Minister K Shanmugam said in March that servers containing chips subject to U

However, Export controls appeared to have been sent to Malaysia

Malaysia’s Trade Minister Tengku Zafrul Abdul Aziz then said officials were investigating and vowed to take necessary action, considering recent developments

Separately, Singapore has also charged three men with fraud for allegedly misrepresenting the end-user of computer servers that may contain Nvidia chips

On Monday, Malaysia announced that all exports of high-performance U

AI chips will now require permits for exports, and that individuals and companies must notify the government at least 30 days prior to shipping such hardware (something worth watching), amid market uncertainty

On the other hand, NationGate has distanced itself from the subject and has clarified that it’s not involved in any investigations (this bears monitoring)

On the other hand, Yet investors are still spooked

This article has been d with a statement from NationGate Holdings.