Report: Megaspeed chip probe moved to DOJ after Nvidia contact
The New York Times reports a Commerce inquiry into Megaspeed's Nvidia chip purchases passed to the Justice Department after Nvidia's lawyer reached out. Nvidia disputes diversion claims.
A U.S. Commerce Department investigation into whether Singapore-based Megaspeed funneled advanced Nvidia artificial intelligence chips to China was handed to the Justice Department after Nvidia contacted Commerce investigators, the New York Times reported on Monday, citing people familiar with the matter. No charges have been announced, and the claims have not been confirmed by any government agency.
What happened
According to the Times, Commerce began looking into Megaspeed, a data center operator that bought large volumes of Nvidia AI processors, in 2024. Officials were reportedly suspicious after a visit to a Megaspeed site in Malaysia, where graphics chips were said to be sitting in boxes rather than installed in server racks. Investigators were examining whether the chips were being redirected to Chinese customers in violation of U.S. export controls, which restrict sales of top-end AI hardware to China.
The newspaper reported that in August 2025, Tim Teter, Nvidia’s general counsel, contacted investigators at Commerce’s Bureau of Industry and Security, the agency that enforces export rules. Teter reportedly said that Jeff Kessler, a senior Commerce official, had cleared Nvidia to reach out directly. Some officials, according to the report, viewed the approach as a serious breach of normal protocol and raised it internally. The inquiry then stalled and was moved to the Justice Department, which can pursue criminal cases. Reports citing the Times say the department asked Commerce to pause its work. The Justice Department typically does not comment on ongoing investigations, and the Times account said the agency did not discuss the matter.
Responses and denials
Nvidia has rejected the diversion allegations. The company has said earlier claims that Megaspeed helped evade U.S. export rules were “thoroughly investigated and debunked last year,” and that it has visited Megaspeed’s facilities and seen no evidence of diversion. Jensen Huang, Nvidia’s chief executive, told Bloomberg News in an interview that the company had “studied all their deployments of our GPUs and counted every one,” and that its dealings with Megaspeed were proper. Megaspeed has reportedly denied illegally moving chips to China, saying inspections found no violations. Several secondary outlets summarizing the Times report noted that they did not include fresh statements from Nvidia, Commerce or the Justice Department on the handoff itself.
The Times and other outlets have also reported that U.S. intelligence agencies viewed a former Megaspeed executive as a suspected Chinese intelligence asset. Huang told Bloomberg his interactions with that person were typical of those with customers in China and that the executive has left Megaspeed. Reuters, citing Bloomberg, reported that China has called the spying narrative unsubstantiated. These allegations rest on anonymous sources; no charges have been disclosed.
Why it matters
Nvidia’s AI processors are among the most sought-after technology in the world, and Washington has tried to keep the most powerful versions out of China. Enforcement has depended on tracking resellers and data centers in Southeast Asia. A transfer to the Justice Department signals the case may be treated as a potential criminal matter rather than a civil export-control review, although the Times report does not say whether charges are planned.
The episode also raises questions about how much contact a company under scrutiny should have with the regulators who oversee it. The Times reported that the outreach alarmed some officials; it is not clear from the reporting whether any rule was broken. Nvidia shares fell sharply as the news spread, according to market coverage.
What is not yet known
It is unconfirmed whether the Justice Department has opened a formal criminal case, whether any person or company will be charged, and what Commerce officials concluded before the handoff. Megaspeed has not been placed on any U.S. trade restriction list, according to Bloomberg-sourced reporting. Jensen Huang is reportedly due to brief members of Congress in a closed-door session on November 18, according to a technology outlet citing the Times; that has not been independently confirmed. Anyone accused in the matter is presumed to have committed no wrongdoing unless a court rules otherwise.
