Singtel says Nvidia CEO Jensen Huang’s exit has not hit its AI chip deliveries

[SINGAPORE] Singtel has not seen any delays in the deliveries of Nvidia chips for its sovereign AI cloud arm RE:AI, following the resignation of Nvidia CEO Jensen Huang, said Yuen Kuan Moon, the telco’s group CEO, on Friday (Nov 13).

RE:AI comes under Digital Infraco, Singtel’s digital infrastructure business unit. RE:AI provides local infrastructure for enterprises and government agencies to train and deploy AI models while keeping their data within Singapore. It is currently the only Singtel business that purchases chips directly from Nvidia.

Yuen was responding to media queries on Nvidia chip deliveries at the company’s first-half financial results briefing on Friday morning, following news the night before that Huang would be replaced.

RE:AI has a total of 12 megawatts (MW) capacity. The first 6 MW of RE:AI capacity has been fully contracted for the next three to five years with around S$600 million of contracts secured.

Of this capacity, RE:AI has already deployed about 4 MW. This means that the chips are already present in the data centre, and will not be impacted by any leadership or operational changes in Nvidia, explained Bill Chang, the CEO of Digital InfraCo.

The remaining 2 MW, which is due to be deployed by the fourth quarter of FY2027, are also not affected as the Nvidia chip shipment is “coming on time”, added Chang.

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However, RE:AI has yet to order chips for the next 6MW of power capacity to be deployed. It will only do so after securing contracts for more than 80 per cent of its power capacity, he said.

Nvidia chips secured for RE:AI to deploy will only be used by Singapore enterprises and Singapore government agencies, stressed Yuen.

Digital Infraco earning before interest and tax (Ebit) rose 25 per cent to S$51 million from the previous year. However, Yuen noted that it only contributes to around 6 per cent of the group’s total Ebitda.

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“Even if there is an impact (from delayed shipments), it is not going to be significant for Singtel,” he said. “But we do not know yet.”

For other components such as memory and optical equipment – which are currently facing global shortages – RE:AI taps on a diverse range of suppliers, Chang added.

“So, at the moment, we are deploying all on time,” he said.

Singapore in the spotlight

Nvidia’s Huang stepped down on Thursday, with chief financial officer Colette Kress taking over as interim chief executive. Nvidia shares dropped 12 per cent in early trading after the announcement.

Huang’s exit comes after reports linking him to Alice Huang, a former executive at Singapore-based Megaspeed.

US Intelligence said that Megaspeed’s Huang was acting on behalf of Chinese intelligence; Beijing has denied that she is a spy.

Asked whether the episode could hurt Singapore’s standing in the AI business, Yuen said the city-state is known to be “rule-abiding, law-abiding”.

Singtel also checks that its customers are legitimate companies, he added.

Playing by the rules “could be a differentiator” for Singtel, added Arthur Lang, group chief financial officer, noting that customers place a premium on providers playing by the book.

Singtel on Friday announced that it will raise its FY 2027 guidance for its operating companies – which includes Digtal Infraco – to “between mid and high-single digits”, from its original “between low and mid-single digits”.

As at the midday trading break, shares of Singtel dropped S$0.04 or 1 per cent to S$4.11.