The US government is investigating Singapore-based Apex Logistics for its suspected role in smuggling Nvidia Corp. AI chips to China, according to people familiar with the matter. As reported by Bloomberg, authorities are looking into whether Apex - a unit of shipping giant Kuehne+Nagel - may have transported AI systems made by Super Micro Computer Inc. in violation of US export restrictions. The investigation may result in the first action against a transportation company for allegedly participating in the illegal semiconductor trade. 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.
Kuehne+Nagel's shares slid as much as 4.2% in European trading on Thursday, the biggest intraday fall in more than three months and underperforming the broader market, according to Bloomberg. Apex is aware of Washington's concerns 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 stated it is cooperating fully with the US investigation and is "committed to complete compliance" with all relevant regulations. 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."
The US government's Commerce Department's Bureau of Industry and Security is examining 47 Apex shipments in total from 2024, as reported by Bloomberg. The investigation began with US government contacting Apex with concerns in late 2024 and again in early 2025. Washington's focus has been on specific shipments throughout 2024, each labeled by two former Apex employees with a shipping code used to indicate that the hardware is not subject to US export controls. The two employees left Apex shortly after the company received word of the probe. According to a person familiar with Apex's response, both individuals applied a shipping code to relevant consignments that designated the hardware as exempt from US export controls, with falsifying shipping records appearing repeatedly across chip smuggling prosecutions.
According to Bloomberg, the smuggling routes involved Nvidia-powered servers going from Taiwan to the US, then to an Asian destination outside of China before delivery to Hong Kong, with the hardware driven into mainland China. Sources familiar with the US investigation said it was focused on the export of AI servers on one part of that journey, from the US to South-east Asia. Apex lacks full visibility into how many restricted servers may have been in the shipments for which it arranged transportation, because it relied on shipping codes and designations assigned by customers and the two departed employees. The company has introduced enhanced compliance procedures since the US investigation began. The investigation highlights how much of the supply chain Washington thinks may be involved in illicit operations, often seeing Nvidia chips pass through multiple countries on their way to China.
The 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. Super Micro declined to comment on Apex Logistics' alleged shipments of its hardware, as reported by Business Standard. The company doesn't have a direct business relationship with Apex, with Apex handling shipments on behalf of customers that purchase servers. An Nvidia spokesperson stated that the company sells products to well-known partners who work with them to ensure all sales comply with US export control rules. 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.
