Nvidia engulfed by Megaspeed chip-smuggling scandal as US export rift widens

Nvidia is at the center of an alleged espionage and chip-smuggling scandal that has exposed a loophole in US export controls and deepened a rift inside the Trump administration over how to keep advanced American semiconductors out of China's hands.

At the heart of the case is Megaspeed International, a Singapore-registered cloud and data-center provider headquartered in the city-state's Ocean Financial Centre. According to CNN, the corporate entity went from an inactive Chinese gaming subsidiary to one of Asia's biggest buyers of cutting-edge US semiconductors in just three years, installing billions of dollars of Nvidia chips in data centers across Southeast Asia.

US authorities and lawmakers suspect Megaspeed of passing those chips on to unauthorized Chinese buyers, a charge the company denies.

Company denies wrongdoing

Megaspeed CEO Tan Yong Pong said in a statement that the company has cooperated with inspections by the US Department of Commerce and has retained a US law firm to independently verify its compliance with export controls. In a later statement, Megaspeed said the executive Alice Huang, also known as Huang Le, left the company on August 30, 2025, and holds no role there, adding that recent media assertions about its business and supply chain are "not supported by verifiable evidence."

Nvidia CEO Jensen Huang resigned after admitting to an affair. Congress has called on him to testify behind closed doors about his relationship with Alice Huang, no relation, whom US officials believe to be a Chinese intelligence asset. Beijing has called the claim a "groundless" attempt to smear China.

Washington clash over the Entity List

Yahoo Finance reported that Treasury Secretary Scott Bessent confronted Commerce Secretary Howard Lutnick in the White House Situation Room on November 5, asking why Megaspeed had not been blacklisted. Lutnick said he did not know, and Commerce has not added anyone to its Entity List in 13 months, even as more than 100 companies reportedly wait for listing.

Senator Tom Cotton warned Lutnick about Megaspeed in an October 2025 letter, saying its chip orders equaled nearly 2% of a US company's global data center sales. Nvidia's board says the CEO's spy scandal did not compromise national security.

Nvidia, valued at roughly $4 trillion, has shed about $700 billion in market value this month and reports earnings on November 17. The company's shares rose 2.7% to $173.29 early Wednesday.