Nvidia intervention preceded transfer of chip probe to Justice Department

Nvidia’s efforts to communicate with U.S. officials over a suspected chip-smuggling investigation preceded an unusual decision to transfer the case from the Commerce Department to the Justice Department, raising new questions about the company’s influence over export-control enforcement.

According to a New York Times report published Monday, Nvidia General Counsel Tim Teter contacted Commerce Department investigators in August 2025 seeking information about an investigation into Megaspeed, a Singapore-based data center company suspected of diverting advanced Nvidia AI chips to China.

In his email, Teter said senior Commerce official Jeff Kessler had given him permission to contact the investigators. The officials were reportedly alarmed by the reference to Kessler, who oversees the department’s export-control operations and reports directly to Commerce Secretary Howard Lutnick.

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. He did not direct investigators to share information with Nvidia or intervene in their investigative decisions, according to a Commerce Department official cited by the Times.

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.

The Justice Department is 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 U.S. technology.

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.

The case is attracting 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.

The latest report adds a separate dimension to the controversy: how Nvidia communicated with officials overseeing an investigation involving its own technology, and whether those interactions affected the government’s enforcement process.

The Times also reported that the Commerce Department has not added a company to its Entity List in more than a year, the longest such stretch in 18 years. The list is a key U.S. mechanism for restricting foreign companies’ access to American technology.

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.

There is no evidence in the report 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.