Megaspeed’s More Than $4.8 Billion in Purchases Fuels Calls to Tighten Nvidia Chip Curbs
Key Facts
Calls have grown in the U.S. Congress to tighten restrictions on China’s access to advanced AI chips, as Singapore-based Megaspeed faces scrutiny over its semiconductor purchases. House Speaker Mike Johnson said there was "growing consensus in Congress that this is an important position to take." Reuters reported that lawmakers from both parties have since called for tougher limits on China’s access to the chips. The moves come amid efforts by Washington, dating back to the Biden administration, to restrict sales of the most advanced AI chips to China. The Associated Press said Beijing has at times responded with countermeasures, prompting debate over how far the U.S. restrictions should go.
One focus of scrutiny is Megaspeed, which the Associated Press said bought more than $4 billion worth of advanced Nvidia chips. A letter from two senators said the company’s purchases of advanced Nvidia chips had exceeded $4.8 billion since June 2024, based on reports they cited. The company said it takes its obligations to comply with U.S. export laws "extremely seriously" and had cooperated with U.S. inspections. It also hired a U.S. law firm to conduct a comprehensive inventory of its graphics processing units and independently verify its export-control compliance practices. Singapore said the previous month, before the Reuters report, that the company remained under investigation.
Treasury Secretary Scott Bessent said his department, along with the State and Defense departments and the U.S. Trade Representative, had for months backed adding Megaspeed to the export-control list, while the Commerce Department was responsible for the matter. He added that President Donald Trump had made clear that China should not get Nvidia’s latest H100 chips. The remarks show a public disagreement over when to place the company on the watchlist, as political debate broadens over China’s access to advanced chips. The Associated Press said Chinese companies had obtained Nvidia chips through companies including Megaspeed. Against this backdrop, lawmakers are focused on ways to control channels through which chips reach China.
The concerns weighed on shares of Chinese companies linked to AI and data centers on Friday, November 13, with Z.AI and MiniMax falling 12% and 8.4%, respectively. Shares of data-center suppliers Zhongji Innolight and Eoptolink Technology fell more than 8%; both companies rely heavily on U.S. markets, according to Reuters. In the previous session, Nvidia shares fell as much as 14% before trimming losses to close down 4.3%, according to a Reuters report. EL7 data showed the stock closed at $166.19 on November 12, compared with a close of $173.73 on November 11. Broadcom, Intel and AMD shares also rose on Thursday after Jensen Huang’s departure, amid investor expectations that customers would diversify their suppliers.
Some members of Congress are seeking to include new restrictions on exports of advanced AI chips to China in the annual defense authorization bill. The proposals include three measures under consideration for possible inclusion in the fiscal 2027 defense authorization bill: the AI Overwatch Act, the Chip Security Act and the Match Act. The House Foreign Affairs Committee approved the three bills earlier in the year, and they became part of the Senate’s defense authorization package. The Remote Access Security Act would give the Commerce Department tools to regulate remote access to restricted technology through cloud-computing services, targeting Chinese companies’ ability to rent data centers abroad to access Nvidia chips. Nvidia is scheduled to report third-quarter fiscal 2027 results on November 17 and hold a conference call at 2 p.m. Pacific time.