Nvidia Chips Are Getting Stolen

Steve Ballmer once told me that in China, 90% of Microsoft (NASDAQ: MSFT) Windows licenses were stolen by local tech companies. He said Microsoft could do little about the loss of billions of dollars. It appears the same has happened to Nvidia (NASDAQ: NVDA) chips. However, Nvidia and allies are doing something about it.

According to Bloomberg, “Bain Capital’s Bridge Data Centres removed a Southeast Asian company from its Malaysian computing hub that the US suspects of smuggling Nvidia Corp. chips.” Bain is a massive private equity company. The company accused of this behavior is Megaspeed International Pte. The new supplier to Bain, after they discovered this,  is Zenlayer Inc. Bloomberg learned of the action through leaked memos. The news service appears very firm about the data it has captured.

There are several instances in which Nvidia chips were almost certainly stolen, primarily to provide computing power to Chinese companies. An individual tied to Super Micro Computer was accused of pirating. Its stock dropped 33% on the day the federal government made charges.

Late last year, Wire China reported that another pirate ring had emerged. “Many people have suspected that chip smuggling is going on through Malaysia or Singapore, but here it’s going directly through the U.S., where law enforcement is much more active,” Lennart Heim, an independent AI policy analyst, told Wire China

In December, the Trump Administration approved the sale of Nvidia’s H200 chips to Chinese companies. Trump said the US government would get 25% of each sale. As part of the deal, however, Nvidia cannot sell its top-of-the-line Blackwell chip to China. Such a sale was labeled a threat to national security. However, rumors persist that Blackwell chips are powering China’s DeepSeek AI product.

In addition to all this espionage, China says its tech companies are developing their own chips that will compete with Nvidia’s. There is no evidence to support that claim.

The pirating of Nvidia Blackwell could be happening. Ballmer said, decades ago, that it was a major hit to its revenue, done in secret