Nvidia Lawyer's Contact Preceded Transfer of Megaspeed Chip-Smuggling Probe to Justice Department, NYT Reports

Commerce Department investigators looking into Megaspeed, a Singapore data center company they suspected of smuggling NVDA AI chips into China, stopped their work late last year after Nvidia's general counsel contacted them, the New York Times reported Monday. The case moved to the Justice Department, which is running a criminal inquiry; according to the report, the Justice Department asked Commerce to pause its work.

In an August 2025 email, Nvidia general counsel Tim Teter told the bureau's agents that Jeff Kessler, the Commerce under secretary who oversees chip export controls, had given Nvidia permission to reach out about the case. When the agents forwarded the exchange, Kessler replied that they should handle the case "strictly by the book," and a Commerce official said he did not order employees to share information with Nvidia. Some officials still viewed the contact as improper. Nvidia said it consults officials to "help government and our partners halt any would-be smugglers"; the Justice Department declined to comment.

U.S. authorities began investigating Megaspeed and one of its executives, Alice Huang, in 2024, after billions of dollars of Nvidia equipment was imported into Malaysia for data centers serving Chinese clients including Alibaba. U.S. intelligence reportedly concluded Alice Huang was a spy for the Chinese government, an allegation Beijing called unsubstantiated; Megaspeed denies smuggling. On Sunday, Nvidia's board opened an investigation into CEO Jensen Huang after he acknowledged a relationship with Alice Huang, who is not related to him.

NVDA closed down 4.3% at $178.67 on Monday, after falling as much as 8.8% intraday according to Bloomberg, as the Huang scandal dominated trading. House committee chairs have asked Huang to attend a closed-door briefing on November 18, the day after Nvidia reports quarterly results. Watch for Justice Department statements on the Megaspeed inquiry and any congressional follow-up on Commerce's handling of the case.