Nvidia Intervened in US Probe of Megaspeed Chip Smuggling
Nvidia's effort to gather details regarding a US probe into alleged chip smuggling came before an unusual shift of the case from the Commerce Department to the Justice Department. The incident has sparked inquiries regarding the chipmaker's connections to high-ranking officials and the management of export-control probes.
According to reports, Nvidia's General Counsel Tim Teter reached out through email to Commerce Department investigators in August 2025. He searched for details regarding an inquiry into Singapore-based data center operator Megaspeed, which US officials believed was channeling advanced Nvidia AI chips to China.
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Teter allegedly stated that Jeff Kessler, the Commerce official in charge of export controls, had permitted him to reach out to the investigators. The reference allegedly disturbed officials since Kessler reported directly to Commerce Secretary Howard Lutnick.
Researchers turned down Nvidia's proposal for a meeting. Kessler then directed the team to carry on its tasks exactly as prescribed, as per a Commerce official mentioned by the NYT. There is no proof that he instructed investigators to disclose information or alter their conclusions.
Nonetheless, the exchange raised internal worries that Commerce's involvement with Nvidia might jeopardize the investigation. The Justice Department subsequently requested the department to halt its work and reassign the case. Federal officials are currently conducting a criminal probe into Megaspeed.
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The transfer was atypical since Commerce investigators had dedicated months to developing the case. They might have taken administrative actions, such as limiting Megaspeed's access to US technology.
Megaspeed imported Nvidia AI equipment worth billions of dollars into Malaysia while establishing data centres throughout Southeast Asia.
Its amenities allegedly catered to Chinese clients, including Alibaba. Offering computing services to clients in China is not intrinsically against the law. However, authorities suspected that certain restricted chips were being sent to China.
Megaspeed has denied accusations of unlawful transfers. On Monday, it reported that inspections conducted by the US and Malaysian authorities, along with Nvidia, found no signs of violations. It also mentioned it was contemplating legal action regarding what it termed deceptive reporting. The dispute has attracted interest due to reports regarding Megaspeed executive Alice Huang and her supposed connections to Chinese intelligence. Nvidia's board has initiated a separate inquiry into CEO Jensen Huang's association with the executive.
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Nvidia states that it frequently provides field information to US authorities and collaborates to stop chip smuggling while safeguarding legitimate sales. The inquiry is still ongoing. The described sequence does not prove that Nvidia received preferential treatment or that its efforts led to the transfer. However, it puts the firm's government interactions under increased examination as Washington tightens restrictions on advanced AI technology exports to China.