The U.S. Commerce Department stopped investigating alleged smuggling of Nvidia AI chips into China by Singapore data centre company Megaspeed, after being contacted by a senior Nvidia executive, the New York Times reported on Nov. 9. Megaspeed had employed Alice Huang, who faces allegations of spying linked to the Chinese government. The case was handed over to the Justice Department.

U.S. officials view Alice Huang as a Chinese government spy, the report said. Nvidia CEO Jensen Huang (젠슨 황) recently acknowledged to the board that he had a close relationship with her. Nvidia said on Nov. 8 it had launched an internal investigation into Jensen Huang.

The United States opened an investigation into Megaspeed in 2024 after the company brought Nvidia AI equipment worth billions of dollars into Malaysia.

Megaspeed has built data centres in Southeast Asia for Chinese clients including Alibaba. That itself is legal. But U.S. officials suspected that some chips were illegally diverted to China, the New York Times reported.

In August 2025, investigators at the Commerce Department's Bureau of Industry and Security received an email from Tim Teter (팀 테터), Nvidia's chief legal officer. Teter asked to be briefed on the Megaspeed investigation. He added that Jeff Kessler (제프 케슬러), an undersecretary at the Commerce Department, had allowed him to reach out about the matter.

After investigators declined to meet, Teter replied that he did not understand what the issue was because Undersecretary Kessler had authorised communication. Investigators were surprised that a superior's name had been invoked, and some viewed it as something that could shake the investigation by violating government procedures, the New York Times reported.

The Commerce Department held an internal meeting and then immediately informed other investigative agencies. The Justice Department asked the Commerce Department to stop its investigation, and the Commerce Department accepted the request.

The Justice Department is now conducting a criminal investigation into Megaspeed.

A Commerce Department official said Undersecretary Kessler did not direct that information be passed to Nvidia and told staff to handle the matter by the book. Kessler did not respond on the matter.

President Trump received a report in October 2025 that Alice Huang was in a relationship with Jensen Huang and was believed to be a spy, but took no particular action. Other agencies proposed putting Megaspeed on a trade restriction list, but the Commerce Department did not move, the New York Times reported.