Nvidia Contact Preceded Transfer of Chip Smuggling Probe From Commerce to Justice Department

A New York Times report published Monday says Nvidia's general counsel contacted Commerce Department investigators in August 2025 about an ongoing investigation into Megaspeed, a Singapore-based data center operator suspected of diverting advanced Nvidia AI chips to China. The case was subsequently transferred to the Justice Department, which is now conducting a criminal investigation.

According to the Times, Nvidia General Counsel Tim Teter emailed Commerce investigators in August 2025 seeking information about the Megaspeed probe. In the email, Teter said senior Commerce official Jeff Kessler — who oversees export-control operations and reports directly to Secretary Howard Lutnick — had given him permission to contact the investigators. The investigators declined Nvidia's request for a meeting. After receiving the email chain, Kessler instructed them to continue handling the case strictly by the book. A Commerce official told the Times that Kessler did not direct investigators to share information with Nvidia or intervene in their investigative decisions [1].

The episode nevertheless prompted internal discussions at Commerce, with officials raising concerns that the department's interactions with Nvidia could compromise the investigation. The Justice Department subsequently requested that Commerce suspend its work and transfer the case, according to people familiar with the matter [1].

The transfer was unusual because Commerce investigators had spent months building the case and could potentially have pursued administrative action to restrict Megaspeed's access to U.S. technology. The Times also reported that the Commerce Department has not added a company to its Entity List — a key mechanism for restricting foreign companies' access to American technology — in more than a year, the longest such stretch in 18 years [1].

Megaspeed and the Alice Huang connection

Megaspeed had imported billions of dollars' worth of Nvidia AI equipment into Malaysia while developing data centers across Southeast Asia to serve Chinese clients, including Alibaba. Although operating data centers for Chinese customers is not itself illegal, U.S. authorities suspected that some of the chips were being illegally rerouted into China [1].

The case has drawn renewed attention following revelations that Megaspeed executive Alice Huang, who reportedly had a personal relationship with Nvidia CEO Jensen Huang, was believed by U.S. intelligence officials to be working for the Chinese government. Nvidia announced Sunday that its board was investigating Jensen Huang's relationship with the executive [1].

Alice Huang, also known as Huang Le, is a Chinese citizen with a reported background in journalism and finance. She led Megaspeed International, which became an official Nvidia Cloud Partner in 2023 and purchased more than $4.8 billion worth of Nvidia chips over roughly two years [2]. Megaspeed's balance sheet ballooned from $33 million at the end of 2023 to nearly $3 billion a year later, much of that growth involving approximately $2.9 billion in refundable deposits from an unidentified source [2].

Singapore police investigated the company in October 2025 over violations of local laws, though specific offenses were not shared publicly. Employees told the Wall Street Journal that Alice Huang continued leading the business after her formal resignation [2].

Congressional response

The revelations have spurred congressional action. Three chip-related measures — the AI Overwatch Act, the Chip Security Act, and the Match Act — are slated for possible inclusion in the fiscal 2027 defense authorization bill. Senators Elizabeth Warren (D-Mass.) and Jim Banks (R-Ind.) said Monday that "Nvidia CEO Jensen Huang's confirmation of a relationship with a suspected spy for China's intelligence service makes these national security concerns even more urgent" and called for passage of the AI Overwatch Act in the NDAA [3]. The House Foreign Affairs Committee advanced all three bills earlier this year; they are now in the Senate NDAA management package [3].

Three Republican House committee chairs have requested a closed-door briefing with Jensen Huang on November 18 about his interactions with Alice Huang and how Nvidia protects itself against foreign threats [2].

Nvidia's position

Nvidia has defended its engagement with government officials, saying it regularly provides information gathered from the field, requests guidance and works with authorities to stop suspected chip smuggling while preserving lawful sales [1]. The company said it had "no reason to believe that either national security or NVIDIA secrets were compromised," but that its board's inquiry would examine all available information [5].

The Times reported there is no evidence that Kessler ordered investigators to halt their work or that Nvidia successfully influenced the outcome. The Justice Department's ongoing criminal investigation means the case has not been dropped [1].

What remains unclear is whether the Commerce Department's Entity List pause reflects a policy shift or case-by-case deliberation, and whether the DOJ criminal probe will result in charges against Megaspeed or individuals. The Nvidia board investigation into Jensen Huang's relationship with Alice Huang is also ongoing.