The U.S. Commerce Department is delaying action related to designating Singapore cloud company Megaspeed for export controls over allegations it brought Nvidia high-performance chips into China, a report said. Separately, a Commerce Department investigation into suspected chip smuggling by Megaspeed was shifted to the Justice Department after contact from Nvidia, another report said.

The Financial Times and other outlets reported on Nov. 10, local time, that the State Department, the Energy Department, the Treasury Department, and the Defense Department, not a Treasury-affiliated agency, pushed to place Megaspeed on the Entity List, an export-control blacklist. But the Commerce Department, which oversees the designation process, has not made a decision and Megaspeed has not been added to the sanctions list.

The Entity List restricts overseas companies seeking to buy U.S. technology. U.S. exporters wanting to sell products to listed firms must obtain a special licence, and the U.S. government uses the list to block advanced technologies that could be used to bolster China’s military capabilities from entering the country. The Commerce Department requested additional material from some candidate firms over the past two months, but it was not confirmed whether Megaspeed was among them.

Megaspeed has been investigated for more than a year over whether it brought controlled Nvidia processors into China. The New York Times reported that Commerce Department investigators pursued the case for months, but it was shifted to the Justice Department after Nvidia’s chief legal officer Tim Teter (팀 테터) contacted a Commerce Department official last year. Teter contacted investigators, saying he had received permission from Jeffrey Kessler (제프리 케슬러), a senior Commerce Department official, and the case was shifted after the Justice Department asked the Commerce Department to halt the investigation and it accepted the request, the report said. Some investigators took issue with Nvidia citing the name of a superior and were said to have worried the contact may have affected investigative procedures. The Commerce Department said Kessler did not directly decide whether to provide information related to the investigation or whether to hold meetings.

The matter has also drawn attention over suspicions about ties between former Megaspeed executive Alice Huang (앨리스 황) and Nvidia Chief Executive Jensen Huang (젠슨 황). Alice Huang is suspected of espionage activities for China, and reports have said she had a personal relationship with Jensen Huang.

Chris Maguire (크리스 맥과이어), a former senior U.S. export-control official, criticised the Commerce Department, saying it did not block purchases of Nvidia chips worth $4.8 billion despite knowing suspicions about Megaspeed’s links to China. Calling it “hard to understand”, he argued that under existing rules, buyers deemed difficult to trust should be subject to licence requirements before sales of high-performance AI chips.

The Commerce Department rejected criticism that it was passive in enforcement. It said it has carried out strong, wide-ranging enforcement including against advanced chip smuggling, and that it has criminally indicted 17 defendants in six investigations, with the scale of smuggling running into several billion dollars.

Megaspeed was spun off from Chinese game company SevenRoad in 2023 and operated as an Nvidia certified cloud partner. It provided services by leasing facilities in Southeast Asia including Singapore and Indonesia rather than owning all of its own data centres. Alice Huang served as a Megaspeed director until November 2023. The current owner is Singapore company Swiftdata, which was established just before Alice Huang stepped down as director.

Megaspeed has been investigated by Singapore police since October 2025. After allegations of chip smuggling surfaced, data-centre lessors were said to have terminated contracts citing the risk of secondary sanctions.

Nvidia says it has already stopped doing business with Megaspeed. An Nvidia spokesperson said Megaspeed was placed on Nvidia’s internal block list in June 2025, before it was added to the Entity List or received notice from the Commerce Department of a separate licence requirement, and that restrictions banning additional sales and shipments have remained in place since then. A pre-notification letter is a document the Commerce Department uses to inform companies that an export licence is required for a specific transaction.