US Commerce Probe Into Megaspeed Halted After Nvidia Intervened: Report

Nvidia's attempt to obtain information about a US investigation into suspected chip smuggling preceded an unusual transfer of the case from the Commerce Department to the Justice Department. The episode has raised questions about the chipmaker's access to senior officials and the handling of export-control investigations.

According to a New York Times report published Monday, Nvidia General Counsel Tim Teter emailed Commerce Department investigators in August 2025. He sought information about an investigation into Singapore-based data centre operator Megaspeed, which US authorities suspected of diverting advanced Nvidia AI chips to China.

Teter reportedly wrote that Jeff Kessler, the Commerce official overseeing export controls, had authorised him to contact the investigators. The reference reportedly unsettled officials because Kessler reports directly to Commerce Secretary Howard Lutnick.

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Investigators declined Nvidia's request for a meeting. Kessler subsequently instructed the team to continue its work strictly by the book, according to a Commerce official cited by the NYT. There is no evidence that he ordered investigators to share information or change their findings.

However, the exchange triggered internal concerns that Commerce's engagement with Nvidia could compromise the investigation. The Justice Department later asked the department to suspend its work and transfer the case. Federal authorities are now pursuing a criminal investigation into Megaspeed.

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The handover was unusual because Commerce investigators had spent months building the case. They could have pursued administrative measures, including restricting Megaspeed's access to US technology.

Megaspeed had imported billions of dollars' worth of Nvidia AI equipment into Malaysia while developing data centres across Southeast Asia. Its facilities reportedly served Chinese customers, including Alibaba. Providing computing services to Chinese clients is not inherently illegal. Authorities suspected, however, that some restricted chips were being diverted into China.

Megaspeed has rejected allegations of illegal transfers. On Monday, it said inspections by the US and Malaysian authorities, as well as Nvidia, had found no evidence of violations. It also said it was considering legal action over what it called misleading reporting.

The controversy has gained attention following reports about Megaspeed executive Alice Huang and her alleged links to Chinese intelligence. Nvidia's board has separately opened an investigation into CEO Jensen Huang's relationship with the executive.

Nvidia says it regularly shares field information with US authorities and cooperates to prevent chip smuggling while protecting legitimate sales.

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The investigation remains open. The reported sequence does not establish that Nvidia secured favourable treatment or that its outreach caused the transfer. But it places the company's government dealings under sharper scrutiny as Washington tightens controls on advanced AI technology exports to China.

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