The Commerce Department's investigation into Megaspeed came to a halt following contact from Nvidia's legal team, according to reporting by Ana Swanson and Devlin Barrett in The New York Times. The inquiry subsequently transferred to the Justice Department, which is pursuing a criminal case against the Singapore-based company, sources told the Times. TNW has not independently verified these claims.
Megaspeed stands at the heart of the Jensen Huang controversy. One day prior, Nvidia's board initiated an independent inquiry into its chief executive. Huang disclosed a relationship with Alice Huang, a former Megaspeed employee. US intelligence officials assess that she worked for Chinese intelligence services. The two are unrelated.
An email that named a top official
For months, investigators from the Commerce Department's Bureau of Industry and Security had been examining whether Megaspeed was illegally diverting Nvidia's artificial intelligence chips to China in violation of American export restrictions, the Times reported.
During August 2025, as the Megaspeed investigation proceeded, Nvidia's general counsel Tim Teter sent a message to the investigating agents. According to the Times, Teter stated that Jeff Kessler had authorized Nvidia to make contact regarding the matter. Kessler holds a senior position at Commerce and answers to Commerce Secretary Howard Lutnick.
The investigators rejected the meeting request and transmitted Teter's correspondence to Kessler. Kessler responded by instructing them to continue following proper procedures, a Commerce official explained to the Times. Certain officials viewed the outreach as a procedural violation that might compromise the investigation's integrity. Subsequently, the Justice Department requested that Commerce suspend its investigation, and Commerce agreed.
Multiple agencies have recommended placing Megaspeed on the Commerce Department's sanctions list. The Commerce Department has not implemented this action, according to the Times. The department has not added any entity to the list within the past year.
What Nvidia, Commerce and Megaspeed say
A Commerce Department representative assured the Times that the department had followed proper procedures in managing this and related investigations. Kessler did not provide a response to the publication, and the Justice Department offered no statement. Nvidia's spokesman John Rizzo outlined the company's reasoning for engaging with government officials.
To answer their questions, provide information we have gathered from the field, request their guidance and instructions and ask whether they have any follow-ups
John Rizzo, Nvidia spokesman
A representative from Megaspeed told the Times that the organization was conducting its own examination of the diversion allegations. The company stated it had offered cooperation to US authorities but received no response, the representative said. Megaspeed has rejected accusations of chip smuggling.
Trump stands by Huang, China denies
On Sunday evening, President Donald Trump publicly backed Huang. He informed journalists that Huang should remain in his position as chief executive. Trump also indicated he would bring Huang along on his planned visit to China, the Times reported.
I haven't heard he's done anything wrong. He dealt with somebody, but you know, so does everybody else
President Donald Trump
In October 2025, Trump received briefings from US intelligence officials regarding Alice Huang's connection to Huang and her suspected role as a foreign intelligence operative, according to the Times. Trump stated he harbored no regrets about disregarding that intelligence.
China's government rejected the espionage allegations on Monday, the Associated Press reported.
The so-called Chinese spy allegation is unsubstantiated. It is nothing but smears against China
Guo Jiakun, Chinese foreign ministry spokesperson
Nvidia's stock price declined by as much as 8.8% on Monday, temporarily erasing nearly $400 billion from the company's market capitalization, Bloomberg reported. Huang is also not anticipated to attend an Anthropic gathering for executives scheduled for Monday evening, Business Insider reported.
Huang has until Wednesday to respond to House committee chairs requesting his attendance at a confidential briefing scheduled for 18 November. Nvidia will release its third-quarter financial results the preceding day.
Source: The Next Web
