Jensen Huang controversy: Megaspeed denies report on illegal Nvidia chip transfers to China, hints at legal action

Megaspeed International has rejected allegations of illegal chip transfers raised in a recent Bloomberg article, asserting that multiple inspections by US and Malaysian authorities, as well as Nvidia, found no evidence of violations. The Southeast Asia-based data centre operator said it operates in compliance with applicable export control regulations and is considering legal action against Bloomberg over what it described as misleading reporting.

In an official statement, Megaspeed said it had undergone multiple on-site inspections and reviews over the past six months by the US Commerce Department's Bureau of Industry and Security (BIS), Malaysia's Ministry of Investment, Trade and Industry, and Nvidia.

"These thorough investigations have confirmed that there has been no evidence of any violations concerning the illicit transfer of chips or any illegal activities," the company said.

Quick answers to key questions

•5 QUESTIONS

1

What did Bloomberg allege about Megaspeed and Nvidia chips?⌵

Bloomberg alleged that Megaspeed rented computing capacity to Alibaba and could have provided Beijing with a backdoor route to access advanced Nvidia chips. Megaspeed has rejected the allegations.

2

How did Megaspeed respond to the alleged illegal Nvidia chip transfers to China?⌵

Megaspeed denied the allegations, saying inspections and reviews found no evidence of illicit chip transfers or other illegal activity. It said it operates in compliance with applicable export control regulations.

3

Which authorities and companies reviewed Megaspeed over the chip allegations?⌵

Megaspeed said it underwent on-site inspections and reviews by the US Commerce Department’s Bureau of Industry and Security, Malaysia’s Ministry of Investment, Trade and Industry, and Nvidia.

4

Did investigations find evidence that Megaspeed illegally transferred Nvidia chips?⌵

According to Megaspeed, the investigations found no evidence of violations involving illicit chip transfers or illegal activities. The company’s statement is its account of the reviews.

5

Is Megaspeed considering legal action against Bloomberg?⌵

Yes. Megaspeed said it does not rule out legal action to protect its reputation and hold Bloomberg accountable for what it called misleading reporting.

Megaspeed added that it takes the allegations seriously and does not rule out legal action to protect its reputation and hold Bloomberg accountable for what it called the misleading nature of the article.

The company's statement comes amid growing scrutiny of Nvidia CEO Jensen Huang following reports about his alleged relationship with a business executive whom US intelligence reportedly identified as a Chinese spy.

In an Opinion piece published on November 9, Bloomberg flagged Singapore-based Megaspeed International, whose former executive Alice Huang has been linked to the controversy surrounding the Nvidia chief. The publication alleged that the data centre operator had rented computing capacity to China's Alibaba Group and provided Beijing with a potential backdoor route to access advanced Nvidia chips.

China has rejected allegations of a suspected Chinese spy plot involving Nvidia CEO Jensen Huang, describing the claims as unsubstantiated and an attempt to smear Beijing. The response comes as Nvidia faces growing scrutiny over Huang's reported relationship with a business executive suspected by US intelligence agencies of gathering information for China, with the controversy also weighing on the chipmaker's shares.

Chinese Foreign Ministry spokesperson Guo Jiakun dismissed the allegations on Monday, November 9, saying they were an attempt to malign the country.

"The so-called Chinese spy allegation is unsubstantiated. It is nothing but smears against China," Guo said.

The controversy follows reports that Huang acknowledged to Nvidia's board that he had been intimate with a business executive whom US intelligence agencies determined was gathering information for Beijing, according to The New York Times.

Huang has not publicly identified the woman involved. Reports have linked her to Alice Huang, a Chinese citizen and former executive at Singapore-based Megaspeed International, a company that has faced allegations of smuggling advanced Nvidia chips into China.

China had previously rejected the allegations reported by The New York Times.

The developments have triggered concerns among investors, with Nvidia shares falling around 5% in pre-market trading on Monday, according to the Associated Press. Bloomberg separately reported that the stock was down about 6% in early trading before the opening bell.

The selloff adds to pressure on Nvidia shares, which have already declined around 22% from their October peak, Bloomberg reported.

Nvidia's board has launched an investigation into the matter following Huang's admission of an affair in an internal staff memo. He reportedly apologised to employees for being unfaithful to his wife.

US President Donald Trump defended Huang, calling him a "fine person" and saying he should remain at the helm of the chipmaker.

Nvidia's board has also said it has "no reason to believe" that national security or the company's confidential information was compromised.

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