What happened
Century Litong and Jiangsu Retal Electronics, firms associated with Alice Hwang, invested in Chinese AI startup DeepSeek via a special‑purpose vehicle (SPV) set up by Monolith Management. Jiangsu Retal contributed 95 million yuan (≈ 19 billion won) while the total size of Century Litong’s stake was not disclosed. The investment was made during DeepSeek’s second funding round (July‑October 2026) and was hidden from the company’s public shareholder register. The Litong Group was presented to DeepSeek as a large‑scale supplier of Nvidia AI chips sourced through the gray market, and the firms have been linked to a Hong Kong company, VFO International, that imported Nvidia chips from an Indonesian subsidiary of Singapore‑based Megaspeed in 2024.
According to a report by The Information, Century Litong—a cloud‑computing firm linked to Alice Hwang and her family—and its parent Jiangsu Retal Electronics participated in DeepSeek’s second funding round. The investment was funneled through an SPV created by Beijing‑based venture capital firm Monolith Management, which is DeepSeek’s third‑largest shareholder.
Jiangsu Retal Electronics contributed 95 million yuan (about 19 billion won) to the SPV. The total amount invested by Century Litong was not disclosed. The Litong Group was introduced to DeepSeek as a supplier capable of delivering large volumes of Nvidia AI chips via the gray market, a claim that DeepSeek employees reportedly verified at the time of fundraising.
Separately, a Hong Kong company owned by Alice Hwang, VFO International, imported Nvidia chips and data‑center equipment in 2024 from the Indonesian subsidiary of Singapore‑based Megaspeed. The transaction occurred after Hwang stepped down from Megaspeed’s board. C4ADS, a U.S. think‑tank, reported that VFO also received 800 G optical transceivers from the same Indonesian unit and co‑invested in a Chinese AI‑computing firm, Zhusuanshunwei, holding a 34 % stake before selling it in 2025.
The article notes that it has not been independently confirmed whether the chips VFO sourced entered mainland China via Hong Kong, and that Hwang does not appear to hold direct shares in Century Litong or Jiangsu Retal Electronics.
Source details: biz.chosun.com
Why it matters
The funding ties deepen scrutiny of how advanced U.S. semiconductors may be reaching China outside official channels. Nvidia’s AI chips are subject to export controls, and the alleged gray‑market route—through Indonesia, Hong Kong and a network of shell entities—could undermine those controls, giving Chinese AI firms like DeepSeek access to high‑performance hardware. If true, the investment also illustrates how individuals with alleged ties to Chinese intelligence can embed themselves in the financing of strategic AI companies, potentially facilitating technology transfer that bypasses export‑control regimes. The episode adds to a growing pattern of opaque investments that intersect with national‑security concerns, prompting calls for tighter oversight of AI‑related capital flows and supply‑chain transparency.
Export‑control regimes for advanced semiconductors rely on end‑user verification and transparent supply chains. The alleged use of an Indonesian‑Singapore‑Hong Kong conduit, combined with shell entities like the Monolith‑managed SPV, suggests a possible loophole that could be exploited by other firms seeking restricted technology.
DeepSeek is a fast‑growing AI model developer that has attracted significant user numbers (over 1.5 million daily users as of November 2026). Access to Nvidia’s latest AI GPUs would markedly boost its capacity, potentially narrowing the performance gap with Western AI leaders.
The involvement of individuals linked to alleged Chinese intelligence operations raises national‑security concerns. If such actors can influence financing decisions, they may also shape the strategic direction of AI research and deployment in ways that conflict with U.S. and allied interests.
The episode adds to a series of recent reports about Chinese firms circumventing chip export restrictions, including stalled Nvidia H200 shipments and investigations into Jensen Huang’s alleged ties to Chinese intelligence. Together, these stories illustrate a broader pattern of supply‑chain opacity that policymakers are beginning to address.
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What to watch next
Regulators in the United States and allied jurisdictions may intensify investigations into the gray‑market chip supply chain and the role of shell companies in evading export controls. DeepSeek’s future fundraising rounds could face heightened due‑diligence scrutiny, especially from investors wary of sanctions risk. Nvidia may be pressured to tighten its downstream monitoring of chip sales and to cooperate with authorities on tracing end‑users. Finally, any legal actions against Alice Hwang or her associated entities could set precedents for how AI‑related financing is policed globally.
U.S. and allied export‑control agencies may launch formal investigations into the VFO‑Megaspeed‑Indonesia route and the role of the SPV in masking ultimate beneficiaries.
DeepSeek’s next fundraising round could be delayed or conditioned on stricter compliance checks, especially from venture capital firms with exposure to U.S. sanctions risk.
Nvidia may increase reporting requirements for large‑scale chip sales to Chinese entities and could cooperate with law‑enforcement to trace the end‑use of its AI chips.
Potential legal actions against Alice Hwang, VFO International, or the involved Chinese firms could set legal precedents for how AI‑related financial flows are regulated and penalized.