Nvidia NASDAQ:NVDA is facing scrutiny in Taiwan after local prosecutors searched the company's Taipei office as part of an investigation into the alleged diversion of advanced AI chips to China, according to a Tuesday Bloomberg report.
Taiwanese authorities are investigating whether three individuals exported servers containing Nvidia AI chips to Japan before they were allegedly redirected to China in violation of U.S. export restrictions. The servers reportedly included advanced chips that require a U.S. government license for sales to China.
As part of the investigation, prosecutors searched the residence of a Nvidia employee and the individual's office in Taipei. The employee was later detained on allegations including document forgery and breach of trust after prosecutors obtained court approval, the report said.
The investigation is viewed as Taiwan's first publicly disclosed enforcement action targeting suspected diversion of advanced AI chips to China. The move comes as the United States has encouraged Taiwan to strengthen oversight of exports involving advanced semiconductor technology and prevent restricted AI hardware from reaching Chinese customers.