Commerce Department Paused Megaspeed Chip Diversion Probe After Nvidia General Counsel Contact in August 2025

{"BIS agents had built a months-long record alleging Megaspeed diverted Nvidia chips to China before the August 2025 outreach. Teter referenced Kessler's approval for direct contact; agents escalated the chain and received instructions to proceed by the book. The handoff shifted the matter to DOJ, which paused Commerce work and assumed the criminal inquiry.","No company has been added to the entity list in over a year, the longest gap in 18 years, despite partner agencies recommending Megaspeed's designation. Internal requirements now route all Nvidia-related probes through senior Commerce approval. Primary records show agents documented procedural concerns over the Kessler-Teter exchange while Nvidia maintained it was assisting enforcement.","The episode aligns with sustained US efforts to restrict advanced semiconductor flows to China regardless of corporate statements. Beijing's foreign ministry has rejected espionage framing as unsubstantiated, while US officials treat the matter as an internal corporate issue pending the November 18 closed-door briefing. Control of Congress by Democrats increases prospects for expanded oversight on export enforcement gaps.","Next steps hinge on DOJ findings and whether Commerce resumes administrative actions once the criminal track clarifies. Entity list additions remain stalled pending interagency resolution of the Megaspeed case."}