US senator seeks Commerce Department investigation into Megaspeed

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By Max A. Cherney

SAN FRANCISCO (Reuters) -U.S. Republican Senator Tom Cotton has asked the Commerce Department to investigate Singapore-based Megaspeed for allegedly diverting Nvidia chips used for artificial intelligence, according to a letter seen by Reuters on Monday.

The letter cites an October report in The New York Times that detailed the alleged diversion of Nvidia chips by Megaspeed, a cloud computing company. According to the report, Megaspeed funneled Nvidia chips to Malaysia and Indonesia that appeared to serve customers in China remotely.

Megaspeed did not immediately respond to a request for comment. The Singapore Police Force on Tuesday said that “investigations are ongoing into Megaspeed for suspected breaches of our domestic laws.”

In July, Reuters reported that demand for repairs of banned Nvidia products boomed, which was also cited by Cotton in his letter. In 2024, Reuters reported that China had obtained high-end Nvidia AI chips in spite of a ban.

“As the Trump administration recently indicated, export controls are an important tool as he navigates America through perilous times against an increasingly aggressive and emboldened adversary,” Cotton wrote. “The pervasiveness of chip smuggling undermines the president and allows U.S. adversaries access to advanced technology where the U.S. maintains significant leverage.”

Cotton said he would continue to work with U.S. President Donald Trump to curb illegal diversions of U.S. chips. His letter was addressed to Commerce Secretary Howard Lutnick.

Cotton previously introduced legislation that would require location verification of chips after they are sold.

Last week, Trump unveiled levies of 100% on China’s U.S.-bound exports and new export controls on “any and all critical software” by November 1. On Sunday, China said the latest tariffs were hypocritical.    

(Reporting by Max A. Cherney in San Francisco; Editing by Thomas Derpinghaus.)