Justice Department Seeks to Take Over Megaspeed Criminal Probe After Months of Commerce Department Work
Key Facts
The U.S. Justice Department asked the Commerce Department to suspend its work and transfer the Megaspeed case to the department as it conducts a criminal investigation into the company, according to a report published by Investing.com on Nov. 9, 2026. The request came after Commerce investigators had spent months building the case, and the department could have pursued an administrative action restricting the company’s access to U.S. technology. The report cited people familiar with the matter as saying Commerce officials raised concerns that the department’s interactions with Nvidia could jeopardize the investigation. The company had requested information about the case, but investigators rejected its request for a meeting. The report did not give a final outcome for the investigation; the case remains under review at the Justice Department.
Communications that preceded the transfer of the case began in August 2025, when Tim Teter, Nvidia’s general counsel, contacted Commerce Department investigators seeking information about the Megaspeed investigation, the report said. Teter said in a message that Commerce official Jeff Kessler had authorized him to reach out. But a department official said Kessler had not asked investigators to share information with Nvidia and had not intervened in their decisions. After the meeting request was rejected, the Justice Department asked Commerce to suspend its work and transfer the case, in a sequence that reflects the sensitivity of dealings between the company and the investigation. The report did not say the transfer resulted in charges or a decision against Megaspeed.
The allegation centers on the possibility that some Nvidia chips were illegally diverted to China, according to the report. By contrast, operating data centers to serve Chinese customers is not itself a violation. The report said Megaspeed imported AI equipment from Nvidia into Malaysia and developed data centers across Southeast Asia to serve Chinese customers, including Alibaba. That commercial activity puts a question at the heart of the case that is distinct from simply having Chinese customers: did some of the chips end up in China in violation of restrictions? The Justice Department is now examining the matter through a criminal investigation, while the Commerce Department could have pursued an administrative action restricting the company’s access to U.S. technology.
Nvidia defended its communications with officials, saying it regularly provides information gathered in the field and seeks guidance, and works with authorities to stop suspected chip smuggling while preserving lawful sales. The company framed the communications as part of its cooperation with government agencies, while Commerce officials, according to the report, pointed to the possibility that those interactions could affect the integrity of the investigation. Republican Senator Tom Cotton had asked Commerce Secretary Howard Lutnick to investigate Megaspeed in a letter dated Oct. 13, 2025. His request included an investigation into the company’s ownership and its connections or suspected ties to U.S. chip companies. That adds earlier political pressure to a case now under criminal investigation by the Justice Department.
The investigation comes as the Commerce Department had not added any company to the Entity List for more than a year by the time of the report, the longest such stretch in 18 years. The list is relevant in this context because the Commerce Department could have pursued an administrative action limiting Megaspeed’s access to U.S. technology, according to the report. The transfer of the case to the Justice Department means the criminal investigation remains ongoing, without the report establishing that the company was added to the list or that a final outcome was reached. In a separate development, Nvidia’s board said it saw no reason to believe national security or company secrets had been compromised, but said an independent investigation would examine all available information. A committee of independent directors, assisted by independent outside legal counsel, will oversee that investigation.
Nvidia shares closed at $177.67 on Nov. 9, 2026, compared with $186.64 on Nov. 6, according to EL7 data. They had closed at $181.6 on Nov. 5, $200.13 on Nov. 4, $206.69 on Nov. 3, and $202.06 on Nov. 2. The Associated Press said the stock fell more than 5% on Monday after the company announced an investigation into reports that a foreign intelligence effort had targeted its chief executive. These data do not attribute the stock’s movement to the Megaspeed case. In connection with the other investigation, Nvidia said its chief executive would remain in his position during the independent probe.