Megaspeed’s $4.8 Billion Purchases at Center of U.S. Probe Into Nvidia Chips
Key Facts
U.S. authorities are examining whether Singapore-based Megaspeed helped circumvent restrictions on Nvidia chip exports to China, in an investigation into allegations that have not been proven. The Associated Press said an investigation opened by the Commerce Department was referred to the Justice Department, whose National Security Division is probing whether the company violated export control laws. The scrutiny also includes Alice Huang, who is associated with the company. The case puts controls on artificial intelligence chip exports to a test over the compliance of customers and partners buying Nvidia equipment. The allegations alone do not prove that any illegal diversion of chips occurred.
The investigations come amid large purchases of Nvidia equipment. CBS News reported that Megaspeed and its Malaysian subsidiary, Speedmatrix, bought $4.8 billion worth of advanced AI equipment and processors during the three years before its November 2026 report. That figure puts the companies’ dealings with Nvidia at the center of scrutiny over the equipment’s destination and use. Megaspeed said reviews and inspections by the U.S. Commerce Department’s Bureau of Industry and Security, Malaysia’s Ministry of Investment and Trade, and Nvidia found no evidence of illicit chip transfers or illegal activity. The company added: "These comprehensive investigations confirmed that there was no evidence of any violations involving illicit chip transfers or any illegal activities."
Reuters said company filings showed Megaspeed’s assets surged to $3 billion in 2024 from $33 million in 2023, while revenue rose to $294 million from zero. The company recorded an after-tax loss of $20 million in 2024, compared with a loss of $21,283 a year earlier, according to the filings cited by Reuters. On its website, Megaspeed describes itself as an Nvidia cloud partner in the Asia-Pacific region and offers access to GB200 NVL72 and HGX H100 systems. This gives the company a stated role in providing access to advanced computing systems, while the investigation focuses on suspected breaches of export restrictions. Nvidia’s board said it saw no reason to believe national security or company secrets had been compromised, and that Chief Executive Jensen Huang would remain in his post and cooperate with the investigation.
Discussion within the U.S. administration extended to the possibility of adding Megaspeed to the Commerce Department’s Entity List. Axios reported that Treasury Secretary Scott Bessent pressed Commerce Secretary Howard Lutnick over the company’s omission from the list, and Lutnick replied that he would "look into it." The outlet also reported that White House and intelligence officials had pressed Lutnick and his advisers to take action on Megaspeed since fall 2025. Meanwhile, China’s Foreign Ministry said the accusation of Chinese espionage was baseless and described it as "nothing but fabrications." The contrast between political pressure and Beijing’s denial places the case within broader scrutiny of the company’s alleged ties to China.
Nvidia shares fell sharply in the sessions before these details emerged. The stock dropped $7.97, or 4.3%, on Monday, November 9, wiping about $190 billion off the company’s market value, the Associated Press reported. The decline continued in the next session, with the stock down about 5.5% at Tuesday, November 10, close. This coincided with heightened attention to the investigation and the risks surrounding chip sales to China, but the reported declines relate to those sessions and do not by themselves prove that the investigation caused the move. In separate trade data, China’s imports rose 41.6% year over year in October, while total imports and exports increased 20% to 44.81 trillion yuan during the first ten months of 2026.