Malaysian authorities acknowledged they cannot locate diverted Nvidia server shipments in an ongoing fraud investigation involving unauthorized exports.

Malaysian Trade Minister Tengku Zafrul Aziz said Tuesday the country will take "necessary action" against Malaysian companies if they are implicated in a fraud case involving Nvidia chips allegedly routed from Singapore. Speaking to CNBC's "Squawk Box Asia," Zafrul stated that "right now, there's no such cases in Malaysia to date, and we are investigating," while adding that Malaysia has no information suggesting data center companies there are misusing chips.

Singapore Law Minister K Shanmugam noted on Monday that servers in the fraud case may have contained Nvidia AI chips sent to Malaysia. The question remains whether Malaysia was a final destination or whether the chips were transferred elsewhere, with Shanmugam asking: "The question is whether Malaysia was a final destination or from Malaysia, it went to somewhere else." When pressed on whether Malaysia knew the current whereabouts of the servers, Zafrul replied, "we don't know," noting that authorities are checking if they went to the right parties.

Singapore charged three men with fraud in cases linked to the alleged movement of Nvidia chips, according to Shanmugam. The chips were embedded in servers supplied by Dell Technologies Inc. and Super Micro Computer Inc. to Singapore-based companies before transfer to Malaysia.

The investigation emerges amid broader concerns about restricted U.S. technology reaching China. Reuters reported in January that the U.S. Commerce Department is investigating whether Chinese AI startup DeepSeek has been using U.S. chips prohibited from export to China. According to Reuters, "organized AI chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates."