A US Commerce Department investigation into Singapore-based data centre operator Megaspeed was halted after Nvidia's intervention, according to the latest reports from the New York Times. Nvidia's General Counsel Tim Teter emailed Commerce Department investigators in August 2025, seeking details about the investigation into suspected chip smuggling to China. The exchange reportedly unsettled officials because Commerce Secretary Howard Lutnick's top export control official, Jeff Kessler, had authorized Teter's contact request. As reported by Investing.com, the officials were alarmed by the reference to Kessler, who oversees the department's export-control operations and reports directly to Commerce Secretary Howard Lutnick.
Commerce investigators declined Nvidia's meeting request amid concerns about potential influence. As reported by the New York Times, Kessler subsequently instructed the team to continue its work strictly by the book, with no evidence that he ordered investigators to share information or change their findings. The exchange triggered internal concerns that Commerce's engagement with Nvidia could compromise the investigation, leading the Justice Department to ask Commerce to suspend its work and transfer the case. According to a Commerce Department official cited by the Times, Kessler did not direct investigators to share information with Nvidia or intervene in their investigative decisions, though the episode prompted internal discussions at Commerce with officials raising concerns about the department's interactions with Nvidia.
Megaspeed had imported billions of dollars' worth of Nvidia AI equipment into Malaysia while developing data centres across Southeast Asia, with facilities reportedly serving Chinese customers including Alibaba. According to the New York Times report, authorities suspected that some restricted chips were being diverted into China, though providing computing services to Chinese clients is not inherently illegal. The company has rejected allegations of illegal transfers, stating that inspections by US, Malaysian authorities, and Nvidia found no evidence of violations. The transfer was particularly unusual because Commerce investigators had spent months building the case and could potentially have pursued administrative action to restrict the company's access to US technology.
The controversy has escalated with the Justice Department now conducting a criminal investigation into Megaspeed. The transfer was particularly unusual because Commerce investigators had spent months building the case and could potentially have pursued administrative action to restrict the company's access to US technology. The investigation remains open, with the reported sequence placing Nvidia's government dealings under sharper scrutiny as Washington tightens controls on advanced AI technology exports to China. Nvidia says it regularly shares field information with US authorities and cooperates to prevent chip smuggling while protecting legitimate sales.
