00:00The deep dive that reporters have done to understand whether we really understand how many GPUs are going to Megaspeed and where they're ending up in. Talk us through it.
00:09Yeah, I mean, there's a lot of evidence. It's important to point out, as you already did, that NVIDIA says there's nothing going on here.
00:17Megaspeed itself says there's nothing going on here.
00:19But, you know, our colleagues reporting here, Caroline, is that there is an investigation going on and, you know, Southeast Asian governments and also Washington are looking at this and still trying to find out whether there has been anything significant going on.
00:38Go ahead.
00:39Well, from what we know, it's a Singapore based company, Megaspeed, operating fully in compliance, as they say, with applicable laws.
00:45But what ultimately has had to spring up ever since the Biden administration back in 2022 was a restriction on sophisticated chips coming from NVIDIA to China.
00:54So suddenly you saw other Asian countries become real areas of focus for importing chips so that Chinese companies could actually do the workload, could do the compute outside of their own country.
01:06Correct?
01:07Yeah, no, that's absolutely right.
01:08There's nothing illegal with setting up a data center and serving Chinese customers, providing those customers don't have links with a banned entity in the U.S., whether that's the military or some company which the U.S. government has decided serves China's military.
01:26However, there is a suspicion about these links, about who's in control of what.
01:32There is a, you know, and this is the problem that NVIDIA has to face and NVIDIA, you know, say, look, there's nothing to see here, there's nothing to worry about.
01:41But as you'll see from our story, there's a lot of links between individuals in China that are, you know, there's a lot of a lack of clarity in the relationships,
01:53which I think everybody is trying to work through to make sure that there is nothing untoward going on.
01:59Because Bloomberg didn't find evidence of any Megaspeed NVIDIA chips actually being diverted to China.
02:05But there's all these inconsistencies, as you say, in Megaspeed Southeast Asia demand and chip inventory and wherever they all end up in.
02:13What's so interesting is this is a moment where maybe actually NVIDIA will get more access to China.
02:20H200s have, in theory, or at least according to a truth social post, been allowed back into China.
02:25You know, the question is whether China wants them, but also whether Megaspeed will actually have Chinese demand going forward if indeed we start to see access once again to mainland.
02:34Yeah, I mean, again, we're in a kind of a transition period where we're trying to find out exactly how this will all play out.
02:41NVIDIA wants to do business directly in China.
02:44That's absolutely true at the moment.
02:46It cannot do that because of these restrictions.
02:49What we're trying to find out is whether the Chinese want to do business directly with NVIDIA.
02:54And if that's the case, what level of demand that will be there.
02:59NVIDIA has really kind of had a good year in Washington.
03:02It's gone from really restrictive rules to a freeing up of some of them.
03:07But again, that has to translate into shipments into that Chinese market.
03:12And we haven't seen that yet.
03:14And we don't know that that will actually happen.
03:16Clearly, stories like this, that there are suspicions about smuggling, that we, you know, perhaps should be more secure and more kind of careful in how we deal with China and Chinese entities don't help that case.
03:28So, again, there's a lot at stake here.
03:30And we really need a lot more clarity about the details of how this is all going to work out.
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