Nvidia Megaspeed Investigation: Chip Probe Paused After Nvidia Email

The Nvidia Megaspeed investigation took a new turn on Monday. The Commerce Department paused its probe into whether Megaspeed, a Singapore company and Nvidia customer, smuggled Nvidia AI chips into China after Nvidia's general counsel contacted the agents running it, The New York Times reported. NBC News separately reported that the Justice Department asked Commerce to stand down after an Nvidia representative reached out, and that the case shifted to Justice. Nvidia says it contacted the agents to answer their questions and ask for guidance.

The report matters for the AI trade because it ties two separate risks together: the board's investigation into chief executive Jensen Huang and the export-control rules that govern Nvidia's sales to China. Both now sit over the biggest AI chipmaker a week before its November 17 earnings.

Aug 2025

When Nvidia's top lawyer emailed agents, per the NYT

8.8%

Nvidia's largest intraday drop on Monday, per Bloomberg

~1%

Nvidia's premarket gain on Tuesday, per CNBC

Nov 17

Nvidia's third-quarter earnings date

What the New York Times reported about Megaspeed

Agents at the Commerce Department's Bureau of Industry and Security spent months investigating whether Megaspeed broke US export rules by moving Nvidia AI chips into China, according to the Times report by Ana Swanson and Devlin Barrett, as summarized by The Next Web. In August 2025, while that work was under way, Nvidia general counsel Tim Teter emailed the agents and said Jeff Kessler, a senior Commerce official who reports to Secretary Howard Lutnick, had given Nvidia permission to reach out.

The agents declined to meet and forwarded the emails to Kessler, who told them to keep handling the case strictly by the book, a Commerce official said, according to the report. Some officials saw the contact as a breach of procedure that could taint the case. The Justice Department then asked Commerce to pause, and Commerce complied. People familiar with the matter told the Times that Justice is now running a criminal inquiry into Megaspeed.

Other agencies had proposed adding Megaspeed to the Commerce Department's Entity List, the Times reported. Commerce has not done so, and it has not added any company to the list in more than a year.

Nvidia's response

Nvidia spokesman John Rizzo told the Times the company contacted the agents to answer their questions, share information it had gathered and ask for guidance. Nvidia has said it regularly talks with government agencies. In October, an Nvidia spokesperson told CNBC that the diversion allegations against Megaspeed had been thoroughly investigated and dismissed last year, as we noted in Nvidia Investigation: Board Probes Jensen Huang's Alleged Spy Link. The Justice Department declined to comment, The Next Web reported.

How Megaspeed connects to the Jensen Huang probe

Megaspeed is the company at the center of the Huang affair. Alice Huang, a former Megaspeed executive, is the woman with whom Jensen Huang admitted a relationship; US officials believe she worked for Chinese intelligence. She is not related to him. Nvidia's board opened an independent investigation on November 8, and CNBC reported that lead independent director Stephen Neal is a key figure in it.

The pressure is widening. At a White House press conference on Monday, President Trump said Huang told him he did not know the woman was a spy, CNBC reported. China's foreign ministry rejected the spy allegations, the Associated Press reported. A Los Angeles law firm has filed a shareholder class action against Nvidia and Huang in federal court in San Jose, CNBC reported, and House committee chairs have asked Huang to attend a closed-door briefing on November 18, The Next Web reported.

Nvidia stock sat out the rebound

Nvidia fell more than 4% on Monday, CNBC reported, while the S&P 500 had its best session since April and the Dow rose more than 1,000 points. At its low, the stock was down as much as 8.8%, wiping almost $400 billion off its market value, Bloomberg reported. In premarket trading on Tuesday, Nvidia was up about 1%, according to CNBC. We covered Monday's broader bounce in AI Stocks Rebound as Morgan Stanley and UBS Call the Selloff Overdone.

What the AI Bubble Index says

The AI Bubble Index read 63.0 after Monday's close, in its Normal band, down from 63.5 a week earlier. Sentiment and attention remains the hottest family at 92.7, and Fragility, at 69.3, sits above Euphoria at 64.6. Momentum cooled to 59.7 after last week's chip selloff. One company's legal trouble does not move the reading much on its own, but Nvidia is one of the largest weights in the AI trade, so a sustained slide in its shares would show up in the valuation and momentum families. The methodology explains how each family is built.

Concentration is the reason a single stock can matter this much. Our guide to the Magnificent Seven and concentration risk explains why, and our Nvidia earnings preview sets out the numbers due on November 17.