jl

I wonder if the Chinese back door into rented GPU capacity is finally getting shut. In the same week, 1/ US intelligence leaked the Jensen story with a "Chinese spy" angle, and 2/ Oracle cancelled Tencent's ~$7B lease unser pressure from washington... the latter went largely unnoticed. I wonder if they are connected and if something bigger is in play. Everyone wants the Jensen story to be about a honeypot, as if chip secrets were being leaked. This is nonsense to me. Utter nonsense. What I don't get is that you don't need a spy to explain how Chinese AI labs get access to Nvidia's best chips. Most of it happened, and still happens, in the open, and most of it is legal. Anyone who has spent time in Johor or Singapore knows how GPUs flow to China. Billions of dollars of GPUs land in Malaysia at a scale Malaysia doesn't need, paid for with money Singapore shouldn't have, for end users who are obviously not Southeast Asian startups or consumer inference. Everyone turns a blind eye. So where does alice huang and Megaspeed fit in? Megaspeed is the Singapore company Alice Huang (the affair) is associated with. Founded in 2023, listed as an Nvidia cloud partner, renting compute to Chinese firms like Alibaba. Its Malaysian affiliate bought at least $4.8B of AI equipment in under two years, and US inspectors found Nvidia chips still sitting in boxes at its Malaysian data center. The case is now with the DOJ, and Megaspeed is still building in Johor btw. I don't know if Megaspeed's GPUs made it to China. Obviously a tonne of supermicro servers did. We have friends on the ground in China who say you can buy them there. I think beyond these export control dodging deals, there's a bigger elephant in the room, that everyone ignores. By far the biggest channel has been American hyperscalers renting capacity to Chinese hyperscalers as offtake, with no chips ever crossing into mainland China. Until this week, Oracle had a ~$7B lease putting ~100,000 Nvidia chips in Southeast Asia to work for Tencent. It was cancelled last week after Washington raised concerns, days after the Megaspeed story broke.. To me it feels coordinated. ByteDance and Alibaba still have big leasing deals with US providers, and all of it is legal. Export controls cover where a chip ships, not who uses it remotely. Makes me wonder if there is a coordinated demolition of this back door model happening. Makes me ask what would happen to GPU prices and hyperscaler stocks if the US actually wants to stop the flow of compute to China and this is the first real step. The Remote Access Security Act would do exactly that by the way. It passed the House 369 to 22 in January and has been sitting in the Senate ever since. congress.gov/bill/119th-cong… I am not a conspiracy guy but if I was U.S intelligence and finally wanted to shut off chinese access, a spy story associating the king of GPUs with a chinese spy leading to more serious chinesee associated deals and pressure on hyperscalers to kill them sounds more effective than saying "We have all been complicit in these multi billion dollar rental contracts but now enough is enough" It just all feels a little off. Like they decided to feed Jensen to the sharks for not fully embracing the export controls.