Sen. Tom Cotton, R-Ark., has called on Commerce Secretary Howard Lutnick to launch an investigation into Megaspeed, a spin-off of Chinese state-owned cloud company 7Road, for allegedly skirting U.S. export control laws and obtaining billions of dollars' worth of American chips.
"While we continue working with President [Donald] Trump to curb illegal diversion of U.S. chips, I respectfully request the Commerce Department investigate Megaspeed, including suspicious ownership, affiliations, or ties to U.S. chip companies," Cotton wrote in a letter dated Oct. 13.
Cotton warned Megaspeed might have used shell companies and subsidiaries to funnel restricted technology to China. The company reportedly received U.S. chips through complex routing involving the sanctioned firm Inspur, as well as offices in Malaysia and Singapore with minimal staff and oversight.
U.S. officials reportedly found export-controlled chips still in boxes at a Malaysian facility tied to Megaspeed. The company ceased ordering from Nvidia after regional authorities tightened smuggling controls this summer.
Cotton described the alleged diversion as part of a broader pattern of chip smuggling benefiting the Chinese government, warning it undermines U.S. leverage and national security. He urged Commerce to examine Megaspeed's ownership structure, affiliates, and ties to U.S. firms.
Newsmax writer Eric Mack contributed to this report.
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