Purchases of More Than $4.8 Billion Put Megaspeed at Center of U.S. Chip Probe
Key Facts
Megaspeed said on November 12 that it had cooperated with the U.S. Commerce Department’s Bureau of Industry and Security and was ready to cooperate fully with any other relevant U.S. government agency. The Singapore-based data center company added that it takes its obligations to comply with U.S. export controls “very seriously.” The statement comes as investigations focus on allegations that Chinese users accessed U.S. chips and technology through Southeast Asia. The company has not announced the results of its review or what its cooperation with authorities has concluded. It said it had retained a U.S. law firm to conduct a “comprehensive inventory” of computing chips and review its compliance with export controls.
Questions center on purchases by Megaspeed’s Malaysian subsidiary, Speedmatrix, which bought advanced artificial intelligence processors and server equipment worth more than $4.8 billion between June 2024 and February 2026, according to a report by Le Monde. The report said leasing the equipment gave Alibaba and Chinese operators access to U.S. technology without actually importing it into Chinese territory. That puts the computing-leasing model at the center of questions about how users access capabilities based on advanced chips. These details remain attributed to the newspaper’s report, while allegations of chip diversion remain under investigation. Singapore has also said it is investigating allegations that advanced Nvidia chips were smuggled into China, without that meaning smuggling has been established.
In Washington, Senator Michael Bennet asked U.S. officials for information about the investigation into Megaspeed and set November 24, 2026, as the response deadline. His letter says the Bureau of Industry and Security opened the investigation, while reports cited in the letter indicate that the Justice Department is now leading it; the letter did not present that as official confirmation from the department. Bennet sought an update on the Justice Department’s handling of the investigation begun by Commerce, and an explanation of efforts to prevent Megaspeed from buying Nvidia chips. The options he asked officials to clarify included the possibility of sending a notification to the manufacturer or placing Megaspeed on an entity list, though the letter did not announce that either action had been taken. He also asked for an explanation of coordination with Singapore, Malaysia and Indonesia on responding to the allegations.
The letter reflects U.S. concern that restricted chip trade and cloud-computing services may provide access to U.S. technology through Southeast Asia. Bennet asked the administration to explain what it is doing to close gaps that could allow Chinese companies to use these capabilities, including coordination with governments in the region. The letter confirms that the investigation began at the Bureau of Industry and Security, but does not establish that a violation occurred or specify an outcome. Any notification or entity-listing remains a possibility raised in the questions to officials. Under the deadline requested by the senator, the administration must provide the information by November 24.
Alongside the government inquiry, Nvidia’s independent directors announced on November 10 the appointment of U.S. lawyer John Kim and law firm Wachtell to conduct a thorough and independent investigation. The inquiry is being overseen by a committee of independent directors, according to a board statement. The company said Chief Executive Jensen Huang supports the investigation and has pledged full cooperation, adding: “I support the investigation and will cooperate fully. I love our country and our company.” The board said it saw no reason to believe a breach had occurred, while continuing to examine the available information. The board has not announced the investigation’s findings or when it will conclude.
Records cited by Reuters show Megaspeed’s assets rose to $3 billion in 2024 from $33 million in 2023. Revenue reached $294 million in 2024, after being zero the previous year, and the company recorded an after-tax loss of $20 million in 2024. The figures provide context on the company’s financial growth in the period before Speedmatrix’s purchases came to light, but they do not resolve questions about how the equipment was used. Singapore police said in October that they were investigating Megaspeed on suspicion of breaching local laws, and authorities said the investigations were ongoing. Reuters reported that Singapore does not apply the unilateral export controls imposed by other countries, but takes action against those who violate its laws or engage in fraud and unfair practices.
Nvidia shares saw sharp moves in previous sessions, losing $7.97, or 4.3%, on Monday, November 9, wiping out about $190 billion in market value, before falling about 5.5% at Tuesday’s, November 10, close. The Associated Press said the stock rose 2.9% on Wednesday, November 11, after declining following the announcement that the company’s board had opened an investigation involving Huang. In after-hours trading, the stock had fallen 8.6% after reports of a board meeting to discuss the chief executive’s position. The agency reported that concern about a possible slowdown in the artificial intelligence sector was an additional worry for investors alongside the company issue. These moves remain tied to a broader market context and do not by themselves establish the investigation’s effect on the stock.