Megaspeed hires US law firm for chip audit amid alleged China smuggling probe

Megaspeed is promising cooperation with U.S. authorities and a lawyer-led review of its chips—not presenting a completed compliance finding. The Singapore-based Nvidia customer said on November 12 that it had retained a U.S. law firm to count its graphics processing units and independently check its export-control practices, amid a criminal investigation into alleged chip smuggling to China.

A chip count and a compliance check

The assignment has two parts: a comprehensive inventory of Megaspeed’s graphics processing units, or GPUs, and independent verification of its export-control compliance practices. Megaspeed described the work as a step to reinforce its commitment to compliance. The statement disclosed the assignment, not its results.

Megaspeed also said it had cooperated with inspections by the Bureau of Industry and Security, the U.S. Commerce Department agency. Its promise to cooperate with any other relevant U.S. authority was broader, but forward-looking. The company said it takes its obligations under U.S. export-control laws “extremely seriously.”

Megaspeed is committed to working constructively and transparently with the U.S. government.

Megaspeed, in its November 12 statement quoted by NBC News

The allegations behind the pledge

Megaspeed was one of Nvidia’s biggest customers in Southeast Asia. NBC News reports that the company is under U.S. criminal investigation for allegedly smuggling American-made chips into China in violation of U.S. export controls.

The statement followed reporting about Alice Huang, who held a senior position at Megaspeed, and her relationship with Nvidia CEO Jensen Huang. NBC News reported that U.S. intelligence agencies had determined she had an affair with the chief executive and was a Chinese intelligence operative.

Her precise relationship with China’s intelligence service remains unclear. A former national-security official with knowledge of the matter told NBC News she might have been asked to cooperate and share information because of her access to Jensen Huang, rather than serving as a career intelligence officer.

China disputes the espionage allegations. On November 12, a foreign ministry spokesperson called them fabricated narratives and accused the United States of using them as a pretext for technology blockades.

Megaspeed did not address the allegations concerning Alice Huang in its statement. Instead, it focused on its handling of chips, its compliance obligations and its willingness to accept government scrutiny.