Commerce Dept. Chip Inquiry Was Halted After Nvidia Intervention

The Commerce Department had been conducting a monthslong inquiry into Megaspeed International, a Singapore-based company suspected of diverting Nvidia's artificial intelligence chips to China in violation of U.S. export controls. The investigation began in late 2024 after Nvidia equipment was discovered unpacked at a data center in Malaysia. Officials were also examining Alice Huang, a former Megaspeed executive whom U.S. intelligence agencies consider a Chinese intelligence asset and who maintained a close relationship with Nvidia CEO Jensen Huang.

The inquiry came to an abrupt stop late last year after Nvidia contacted the Commerce Department. The case was then transferred to the Justice Department, which handles criminal prosecutions, rather than continuing under Commerce, which oversees export licensing and enforcement. The transfer has raised questions about whether Nvidia's intervention influenced the decision or simply coincided with a planned handoff.

Nvidia disputes any wrongdoing, stating that earlier investigations found no evidence of chip diversion and that it has accounted for every deployed GPU. The company also says Megaspeed has no Chinese shareholders and describes its dealings as ordinary business. Singapore authorities are conducting their own investigations into Megaspeed, but no illegal diversion of U.S.-origin chips has been publicly established.

The backdrop is Washington's effort to keep advanced AI chips out of China through export restrictions that create incentives for workarounds such as transshipment through third countries. Southeast Asian hubs like Singapore and Malaysia have drawn scrutiny because they host major data centers and trading operations, making the Megaspeed case a test of enforcement capabilities.

Nvidia's board announced on November 8, 2026, that it had launched an independent investigation to examine claims that Jensen Huang may have been targeted by foreign intelligence. Nvidia shares fell in after-hours trading following the announcement. No charges have been publicly announced, and no diversion has been established.

The Justice Department now holds the case, a move that could signal a more serious criminal inquiry or push the matter into a slower, quieter track. Key developments to watch include the conclusions of Nvidia's board investigation, whether the Justice Department brings any action related to Megaspeed, and the outcome of Singapore's local investigations.