A monthslong Commerce Department investigation into whether Nvidia's AI chips were being smuggled into China didn't end — it was moved. And the move, according to the New York Times, came right after Nvidia's own general counsel reached out to the agents running the case.
The investigation centered on Megaspeed, a Singapore data-center company examined since 2024 after it imported billions of dollars of advanced Nvidia hardware into Malaysia for data centers serving Chinese clients, including Alibaba. Investigators suspected some chips were illegally routed onward into China; its Malaysian affiliate acquired at least $4.8 billion in Nvidia-powered hardware between June 2024 and February 2026.
In August 2025, Nvidia general counsel Tim Teter emailed the Bureau of Industry and Security investigators on the case, seeking information — and telling them Under Secretary Jeff Kessler had given Nvidia permission to reach out. The agents were alarmed: Kessler is their superior, a Trump nominee, and some officials viewed the contact as a breach of procedure that risked tainting the case. Commerce notified partner agencies, the Justice Department asked Commerce to pause its work, and Commerce complied. The Justice Department is now conducting a criminal inquiry into Megaspeed, according to people briefed on the matter. No one has been charged, and Megaspeed denies smuggling.
The reporting establishes a sequence, not a cause — it does not show Kessler ordered the suspension, or that Nvidia had any hand in the transfer. But the appearance is compounding: other agencies have proposed placing Megaspeed on Commerce's entity list, and the department has not moved, adding no company to the list in over a year, the longest stretch in 18 years.
The responses are a wall of procedure: Commerce said it handled the matter "strictly by the book"; Nvidia spokesman John Rizzo said the company consults officials to answer questions and share field information; the Justice Department declined to comment; Kessler did not respond.
The case now sits on top of the board investigation Nvidia opened Sunday into chief executive Jensen Huang himself, after he acknowledged a relationship with Megaspeed executive Alice Huang, whom U.S. officials have concluded worked for Beijing. President Trump, briefed on that intelligence roughly a year ago, said Monday he believed Huang, according to NBC News. Nvidia shares fell nearly 5% on the day. Watch November 11, when three House committee chairs expect Nvidia's answers, and November 18, Huang's closed-door briefing.
— via The New York Times