Commerce Department Halts Probe After Nvidia Outreach
The U.S. Department of Commerce halted its monthslong investigation into Singaporean data center company Megaspeed last year after receiving contact from Nvidia, subsequently transferring the case to the U.S. Department of Justice for a criminal investigation. The inquiry, which began in 2024, focused on suspected semiconductor smuggling involving advanced artificial intelligence equipment imported into Malaysia for data centers serving Chinese clients including Alibaba.
According to reports published on November 9, 2026, by Chosun Biz and DNYUZ, investigators from the Commerce Department’s Bureau of Industry and Security (BIS) faced an abrupt shift when Nvidia’s general counsel, Tim Teter, emailed an investigator seeking a meeting. Teter stated he had the approval of Commerce Undersecretary Jeffrey Kessler. Investigators expressed alarm that an executive invoked a superior’s name, warning that the interaction could improperly influence an inquiry where Nvidia itself had not been ruled out as a potential subject.
Background on the Megaspeed Investigation and Alice Huang
The investigation into Megaspeed intensified following U.S. intelligence surveillance surrounding Alice Huang, also known as Huang Le, a former senior executive at the Singaporean firm. U.S. officials concluded that Huang acted as a spy working on behalf of the Chinese government and allegedly approached Nvidia CEO Jensen Huang to gather sensitive information regarding cutting-edge AI chips and U.S. policy insights. On Sunday, November 8, 2026, Nvidia announced it was opening an internal investigation after Jensen Huang acknowledged an intimate relationship with Alice Huang to the company’s board.
Between 2024 and late last year, Megaspeed imported billions of dollars worth of advanced Nvidia AI equipment into Malaysia. U.S. investigators grew concerned that these high-performance semiconductors could be illegally diverted to China in violation of strict federal export controls. While data center construction and hardware imports are legal, federal authorities suspected the illicit rerouting of controlled technology to Chinese tech giants.
Transfer to the Justice Department and Institutional Scrutiny
Following the outreach by Nvidia’s general counsel, BIS investigators forwarded the correspondence to Undersecretary Kessler, who responded that the matter should be handled strictly according to standard rules. A Commerce Department spokesperson maintained that the agency enforces its rules strictly by the book. Nevertheless, current and former government officials familiar with the matter viewed the unusual sequence and subsequent transfer as sensitive.
At the request of the Department of Justice, the Commerce Department complied and paused its inquiry, handing the active case over to federal prosecutors for a criminal investigation. A Department of Justice spokeswoman declined to comment on ongoing inquiries, while Megaspeed stated it was conducting an internal probe into chip diversion allegations and had unsuccessfully offered cooperation to U.S. authorities.