Nvidia faces mounting scrutiny over reports that 240,000 chips reached China

Nvidia is under pressure from Washington and its own board after reports that a network tied to a former executive of a Singapore firm moved hundreds of thousands of its restricted AI chips into China. The allegations are unproven, and Nvidia disputes that anything improper happened.

The allegations

The Information reported that Alice Huang, who has no relation to Nvidia CEO Jensen Huang, built a network of companies across China and Singapore with her husband and sister. The network allegedly moved about 240,000 H100, H200 and some A100 chips into China, worth at least $7.5 billion. She was a former executive at Megaspeed International, and US intelligence agencies reportedly consider her a Chinese intelligence asset who maintained a close relationship with Jensen Huang. China’s foreign ministry has called the spy accusations groundless. Megaspeed has denied wrongdoing.

The report also points to signs that the Chinese startup Moonshot AI used Nvidia chips that never received US licences, and to indications that even the most advanced chips, which Washington does not consider for export licensing, reached mainland China.

The halted investigation

A separate report has deepened the controversy. A Commerce Department inquiry into Megaspeed began in late 2024, after Nvidia equipment was found unpacked at a data centre in Malaysia. It was later moved to the Justice Department, and the work stopped after Nvidia reached out to officials. Whether that contact influenced the handoff or coincided with a transfer already planned is unresolved. No illegal diversion of US-origin chips has been publicly established. The Financial Times reported that the Defense and State departments pushed to add Megaspeed to the export control list.

How chips reach China

US rules bar direct sales of the chips to China-based companies, so servers are routed to entities in Singapore, Malaysia, Indonesia and Thailand, and then shipped on to China. Such sales are lawful in themselves, but a US government report names Malaysia, Thailand and Singapore as “permissive jurisdictions” in smuggling cases. Earlier cases followed the same pattern. In November 2025 the Justice Department charged four people with smuggling Nvidia and HP products to China through Thailand and Malaysia.

Nvidia’s response

Nvidia’s board announced on November 8 that it had opened an independent investigation, which will examine claims that Huang may have been targeted by foreign intelligence. Huang has said for more than a year that there is no evidence Nvidia AI chips are being diverted to China. Republicans have called for him to resign. The Financial Times reported on November 3 that Nvidia told data centre and cloud clients to allocate at least 51% of their offerings to non-Chinese firms, and that Oracle cancelled a $7 billion contract to lease chips to Tencent.

The business at stake

Nvidia’s own filings say it is effectively foreclosed from China’s data centre market. Licences for certain H20 products began in August 2025, and licences for small amounts of H200 products began in February 2026, with no revenue yet from the H200 programme. Nvidia reports earnings on November 17, where investors will watch for commentary on export compliance and regulatory moves.