The scandal involving Nvidia CEO Jensen Huang has now ensnared the U.S. Commerce Department.
The Financial Times reported on Nov. 10, citing sources, that the department has delayed for more than two months placing Singaporean data center company Megaspeed on an export-control blacklist over suspicions of Chinese espionage.
The Departments of Defense, State, Energy and Treasury called for the listing, but Commerce, which manages the list, has delayed its announcement, saying it needs more information on some companies in a new batch of proposed additions.
What is the Entity List?
The Entity List is an export-control list maintained by the Commerce Department’s Bureau of Industry and Security (BIS). Once a company is added, U.S. firms cannot sell it technology or products without a license. Listings are decided by the End-User Review Committee, chaired by Commerce, with the Departments of Defense, State, Energy and Treasury holding voting rights.
If the FT’s report is accurate, all four voting departments supported the listing, while the department chair has held up its announcement. Commerce has not announced any new additions to the list in the past two months.
U.S. authorities have been investigating Megaspeed for more than a year over allegations that it bought advanced Nvidia chips and diverted them to China. In 2023, Alice Huang acquired a Singapore subsidiary of Chinese gaming company SevenRoad through a British Virgin Islands shell company and renamed it Megaspeed. She remained listed as a director in Singapore’s corporate registry through November 2023.
Trade records show that Megaspeed’s Malaysian subsidiary, Speedmatrix, bought at least $4.8 billion worth of Nvidia-based AI equipment between June 2024 and February 2026. In a September report, research organization C4ADS estimated that Megaspeed imported $4.6 billion worth of Nvidia hardware between 2022 and 2025. These figures represent purchases; they do not establish how much was shipped to China.
Nvidia cut ties last year
In June last year, Nvidia placed Megaspeed on its own restricted-customer list and stopped new sales and shipments. The company said the move was voluntary, not a government sanction.
In a statement on its website last December, Megaspeed said inspections by BIS, Malaysia’s trade ministry and Nvidia had found no evidence of illegal diversions. It called media reports “misleading” and threatened legal action.
That is where questions about Commerce’s responsibility have intensified. According to accounts published by U.S. media, Secretary Howard Lutnick received a top-secret memo in May, before Donald Trump’s visit to China, saying U.S. intelligence agencies had uncovered a relationship between Huang and a woman suspected of being a Chinese spy.
Secretary of State and National Security Adviser Marco Rubio reportedly briefed Trump directly aboard Air Force One on the way to China. Huang accompanied Trump on the trip. Afterward, on May 14, Commerce approved Nvidia H200 purchases by about 10 Chinese companies. Chip-sale licenses continued even after the department received the memo.
Trump said at the time that he “didn’t know.” Chris McGuire, who previously oversaw export controls at the White House National Security Council, said, “It’s hard to understand how Commerce could have known for months that Megaspeed was run by the hands of Chinese spies,” and questioned why the purchases had not been blocked.
The matter heads to Congress
In an internal memo on the 8th, Huang acknowledged his relationship with Alice Huang. She is reported to have used her connection with the CEO to procure at least $7.5 billion worth of semiconductors.
Nvidia’s board has hired a former federal prosecutor to conduct an independent investigation. The chairs of three House committees have asked Huang to give a closed-door briefing on the 18th.
Nvidia shares fell 5.5% to close at $168.89 on the 10th, then rose more than 2% intraday on the 11th. The stock is down about 18% so far this month. Investment bank Baird downgraded its rating to Neutral on the 11th, citing uncertainty over the CEO. Nvidia is due to report earnings on the 17th.
The Nvidia servers that went to Megaspeed contain high-bandwidth memory (HBM) from Samsung Electronics and SK Hynix. Last week, it emerged that South Korean-made HBM was being smuggled into China hidden inside lower-spec servers.
The more closely the United States scrutinizes its supply chains, the more likely South Korean memory makers are to come under scrutiny as well. On the 9th, the South Korean government told the National Assembly that there had been no disruption to Nvidia GPU deliveries, while adding that it would “have to watch the situation for a few days.”