By Hamza Faisal
A monthslong US investigation into suspected smuggling of Nvidia's artificial intelligence chips into China came to an abrupt halt late last year after Nvidia's own general counsel contacted the officials running the case, The New York Times reported on Monday.
The probe centred on Megaspeed, a Singapore-based data-centre company that US authorities suspected of diverting advanced Nvidia chips to China. The Commerce Department's Bureau of Industry and Security had been pursuing the case for months when its work was suddenly paused and the matter transferred to the Justice Department, which is now conducting a criminal inquiry.
An email that unsettled investigators
According to the Times, the turning point came in August 2025, when Nvidia general counsel Tim Teter emailed Commerce investigators seeking information about the Megaspeed inquiry. Teter wrote that Jeff Kessler, the senior Commerce official overseeing export controls, had given Nvidia permission to reach out about the case.
Investigators declined to meet Teter, the report said. Kessler subsequently told the team to continue its work strictly by the book. A Commerce official cited by the Times said there was no evidence Kessler ordered investigators to share information or change their findings.
But the contact alone was enough to unsettle officials, who worried the engagement could compromise the investigation. The Justice Department then asked Commerce to suspend its work and hand over the case, converting a civil export-enforcement matter into a criminal inquiry.
Billions in hardware, crates still sealed
Megaspeed had imported billions of dollars' worth of advanced Nvidia equipment into Malaysia since 2024 while building data centres across Southeast Asia for Chinese clients, including the technology company Alibaba, according to the report. Its Malaysian affiliate acquired at least $4.8 billion in Nvidia-powered hardware, and inspectors found some systems still sealed in shipping crates.
The company has rejected allegations that it transferred chips illegally. The investigation remains open as a criminal matter.
A second Nvidia controversy in two days
The report lands a day after Nvidia said its board had opened an independent investigation into chief executive Jensen Huang, following reports that he had a relationship with Alice Huang, a senior Megaspeed executive whom US officials concluded had been recruited by China's Ministry of State Security. Nvidia said its board had no reason to believe company secrets or national security were compromised.
Neither Nvidia nor the Commerce Department has said whether the halted probe will resume in its new form, and the Justice Department has not commented on the criminal inquiry. For now, the episode leaves open questions about how export-control investigations are handled when the company at the centre of them is also one of the world's most valuable.
