US Suspended Chip-Smuggling Probe Into Firm Linked to Jensen Huang's Alleged Spy Affair After Nvidia Intervened

The US Commerce Department's Bureau of Industry and Security suspended its investigation into Singapore-based Megaspeed, a firm suspected of diverting advanced Nvidia AI chips to China, at the Justice Department's request after Nvidia general counsel Tim Teter emailed investigators in August 2025, according to a 9 November New York Times report. The Justice Department took over the case as a criminal investigation, and officials described the transfer as unusual and potentially delaying efforts to stop semiconductor shipments to Megaspeed, which began importing billions of dollars' worth of Nvidia AI equipment into Malaysia in 2024. The report did not establish that Nvidia improperly influenced the suspension, and other agencies' proposal to add Megaspeed to the Commerce Department's Entity List was not acted on.

US Suspended Chip-Smuggling Probe Into Firm Linked to Jensen Huang's Alleged Spy Affair After Nvidia Intervened Nvidia lawyer's outreach alarmed investigators, prompting the probe's transfer to the Justice Department A US Department of Commerce investigation into Singapore-based Megaspeed was suspended at the Justice Department's request after Nvidia's general counsel contacted investigators, according to The New York Times. A former Megaspeed executive was also reportedly involved in a romantic relationship with Nvidia CEO Jensen Huang https://www.ibtimes.co.uk/nvidia-investigation-jensen-huang-china-intelligence-allegations-1831111 . She was also reportedly under US intelligence scrutiny over suspected links to China. Investigators were examining whether advanced Nvidia AI chips had been illegally diverted to China. The Justice Department subsequently took over the case for a criminal investigation, although it remains unclear whether other factors contributed to the suspension. Nvidia's Contact Raises Concerns According to the 9 November report, the Commerce Department's Bureau of Industry and Security BIS had been conducting probes for months when their work was abruptly halted. The controversy centres on an August 2025 email from Nvidia general counsel Tim Teter to investigators at the BIS. Teter reportedly sought a meeting with investigators, saying Commerce Undersecretary Jeff Kessler had given him permission to contact them about the case. When agents declined, Teter questioned their refusal, citing Kessler's permission to communicate with BIS staff. The exchange alarmed some investigators, who feared the contact could compromise the inquiry, particularly because Nvidia had not been ruled out as a potential subject of the investigation. When investigators forwarded the email to Kessler, he replied hours later, instructing them to handle the case in accordance with regulations. A Commerce Department official maintained that he neither ordered agents to share information nor directed them to meet Nvidia representatives. Probe Transferred to Justice Department Department of Commerce officials later discussed the matter internally and informed other investigative agencies. At the Justice Department's request, the department paused its investigation before transferring the case. The New York Times reported that officials viewed the way the case was transferred as unusual and concerning, saying it may have delayed efforts to stop advanced semiconductor shipments to Megaspeed. The report didn't establish that Nvidia https://www.ibtimes.co.uk/nvidia-5-trillion-milestone-ai-bet-1807219 improperly influenced the decision to suspend the Department of Commerce's investigation. Spy Allegations Raise Questions The US government began investigating Megaspeed in 2024, after the company started importing billions of dollars' worth of advanced Nvidia AI equipment into Malaysia. Megaspeed was developing data centres across Southeast Asia to serve Chinese clients, including Alibaba. US authorities suspected that some Nvidia chips may have been diverted to China in violation of US export controls. The investigation also reportedly examined former Megaspeed executive Alice Huang https://www.ibtimes.co.uk/alice-huang-jensen-huang-nvidia-intelligence-allegations-1830954 and her reported relationship with Nvidia CEO Jensen Huang. US intelligence agencies reportedly monitored her over suspicions that she was seeking information about his advanced AI chip plans and US administration trends. Export Restrictions Remain Unresolved Other US agencies reportedly proposed adding Megaspeed to the Department of Commerce's Entity List, which imposes additional export licensing requirements, but the department did not act on the proposal. The Department of Commerce said it handled the case in accordance with regulations, while Nvidia said its communications with government officials were intended to provide information and seek guidance. Megaspeed, meanwhile, said it was conducting an internal investigation into suspected chip diversion and had offered to cooperate with US authorities. © Copyright IBTimes 2026. All rights reserved.