Megaspeed pledges cooperation in U.S. chip-smuggling investigation

Megaspeed International said Thursday it would cooperate with U.S. authorities as the Singapore-based company faces a criminal investigation into allegations that it smuggled American-made chips into China in violation of export controls. The statement came amid scrutiny of an affair between Nvidia chief executive Jensen Huang and Alice Huang, a former Megaspeed leader.

Megaspeed denies wrongdoing. It said it had retained a U.S. law firm to lead a comprehensive census of its graphics processing units and independently verify its export-control compliance practices.

“Megaspeed is committed to working constructively and transparently with the U.S. government,” the company said. It said it had cooperated with inspections by the Commerce Department’s Bureau of Industry and Security and stood ready to cooperate with other relevant U.S. authorities. In an earlier statement, Megaspeed said reviews by U.S. and Malaysian authorities and Nvidia had found no evidence of illicit chip transfers or other illegal activity.

NBC News reported that U.S. intelligence agencies determined Alice Huang was a Chinese intelligence operative, though her precise role and relationship with China’s spy service remain unclear. China has dismissed the spying allegations as “smears.” A foreign ministry spokesperson said Thursday that the United States should stop “fabricating so-called espionage narratives as a pretext for implementing technological blockades.”

Jensen Huang, who is not related to Alice Huang, has apologized to Nvidia employees for the affair. Nvidia has launched an independent investigation, and its board said it had no reason to believe company secrets or national security were compromised. NBC News reported that the board met to decide whether he would remain at the company’s helm, citing two people familiar with the matter. A shareholder filed a class-action lawsuit Tuesday alleging that he concealed the relationship and misled investors about the national-security concerns it raised.

Megaspeed and its Malaysian affiliate, Speedmatrix, bought $4.8 billion in Nvidia AI equipment and processors over three years, according to CBS News. CBS reported that U.S. investigators say Alice Huang used industry contacts and shell companies to gain access to 240,000 chips barred from export to China. The allegation has not been established in the accounts provided.

Questions have also emerged about Megaspeed’s offices and corporate structure. The Straits Times found its Singapore headquarters locked, while The New York Times found only two people there on a workday, CBS reported. CBS also cited reports describing a dilapidated Malaysian storefront, another office in a shopping mall and an Australian subsidiary whose listed director was a newspaper vendor.

Corporate filings cited by CBS show that a company incorporated in 2015 as 7Road International was a subsidiary of a Shenzhen-based gaming developer. A British Virgin Islands company named Huang Le Limited acquired it in March 2023. That same month, it was renamed Megaspeed and Alice Huang became managing director. She and another director had resigned by the end of October 2023, according to documents cited by CBS. CBS also cited a report by short-selling firm Culper Research in which employees said she continued to run the company.

CBS reported that President Donald Trump said this week that the FBI was also investigating Jensen Huang’s romantic and business ties to Alice Huang. Senators Elizabeth Warren and Chris Coons have asked Commerce Secretary Howard Lutnick to preserve records related to the matter, according to NBC News.