U.S. commerce department delays Megaspeed blacklist move amid chip smuggling scrutiny

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U.S. delays Megaspeed blacklist move

Highlights

U.S. commerce department delays adding Megaspeed to the entity list, requesting more information amid multi-agency pressure and chip smuggling scrutiny.
After Nvidia chip smuggling allegations and regulatory probes, data center operators have ended or reassessed leases with Megaspeed to mitigate secondary sanctions risk, impacting its operations.
Nvidia voluntarily blocked sales and shipments to Megaspeed as of June 2025, despite Megaspeed not being officially placed on the entity list or receiving an 'is informed' letter.

Inter-agency review stalls listing effort

As first reported by the Financial Times, several U.S. government agencies are pushing for Megaspeed to be added to the commerce department's entity list, but the department has sought during the past two months to delay new inclusions while asking counterparts for more information on some companies under review.

The entity list is one of Washington's strongest export control tools because U.S. companies need commerce department licences to sell technology to listed groups. People familiar with the deliberations say the state, energy and Treasury departments, along with the Pentagon, are among those backing Megaspeed's inclusion, although it remains unclear whether the department's request for more information is directed specifically at Megaspeed.

The commerce department, which chairs the inter-agency process, does not comment on internal discussions about the list. The Pentagon refers questions to commerce, the energy department refers questions to the White House, which declines to comment, and the Treasury department also declines to comment, while the state department does not respond to a request for comment.

Chris McGuire, a former senior U.S. government export controls official, says it is "mind-boggling" that commerce knew months ago Megaspeed was allegedly being run by a Chinese spy but did not stop it from buying Nvidia chips. He also says commerce should move to ensure untrusted companies such as Megaspeed cannot buy AI chips without an export licence under existing rules.

Operations face mounting commercial and regulatory pressure

Megaspeed, a Singapore-based cloud provider spun off from Chinese gaming group 7Road in 2023, operates as an Nvidia Cloud Partner and is authorized to buy GPUs from the U.S. chipmaker. It provides computing services through mostly leased facilities across Southeast Asia, including Singapore and Indonesia.

U.S. authorities have been investigating for more than a year whether Megaspeed is smuggling Nvidia chips into China. Scrutiny intensifies again after recent attention on allegations involving Alice Huang, a Megaspeed executive suspected of spying for China, and reports that President Donald Trump was briefed in May on a top-secret memo concerning her relationship with Nvidia chief executive Jensen Huang.

Corporate filings in Singapore show Alice Huang is among several Chinese nationals listed as directors until November 2023. Megaspeed's owner is listed as Singaporean company Swiftdata, set up in late 2023 shortly before Huang steps down as a director, and Swiftdata's sole director, Tan Yong Pong, is also Megaspeed's sole director; he does not respond to requests for comment.

Singapore police have been investigating Megaspeed since October 2025, and the company continues to operate under heavy regulatory scrutiny. After reports of alleged Nvidia chip smuggling, international data center operators end or reassess leases with Megaspeed to reduce secondary sanctions risk, forcing it to relocate or terminate hardware deployments.

Nvidia has also halted sales to Megaspeed for more than a year, according to people familiar with the matter and a company statement. A spokesperson says the company voluntarily placed Megaspeed on its block list in June 2025, barring any further sales or shipments, even though Megaspeed is not on the entity list and has not received an "is informed" letter from the commerce department.

In a previous article, we explained Nvidia’s push for deeper AI safety dialogue with Chinese companies amid rising regulatory focus.

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