SAN FRANCISCO, Oct 14 (Reuters) - U.S. Republican

Senator Tom Cotton has asked the Commerce Department to

investigate Singapore-based Megaspeed for allegedly diverting

Nvidia ( NVDA ) chips used for artificial intelligence,

according to a letter seen by Reuters on Monday.

The letter cites an October report in The New York Times

that detailed the alleged diversion of Nvidia ( NVDA ) chips by

Megaspeed, a cloud computing company. According to the report,

Megaspeed funneled Nvidia ( NVDA ) chips to Malaysia and Indonesia that

appeared to serve customers in China remotely.

Megaspeed did not immediately respond to a request for

comment. The Singapore Police Force on Tuesday said that

"investigations are ongoing into Megaspeed for suspected

breaches of our domestic laws."

In July, Reuters reported that demand for repairs of banned

Nvidia ( NVDA ) products boomed, which was also cited by Cotton in his

letter. In 2024, Reuters reported that China had obtained

high-end Nvidia AI chips in spite of a ban.

"As the Trump administration recently indicated, export

controls are an important tool as he navigates America through

perilous times against an increasingly aggressive and emboldened

adversary," Cotton wrote. "The pervasiveness of chip smuggling

undermines the president and allows U.S. adversaries access to

advanced technology where the U.S. maintains significant

leverage."

Cotton said he would continue to work with U.S. President

Donald Trump to curb illegal diversions of U.S. chips. His

letter was addressed to Commerce Secretary Howard Lutnick.

Cotton previously introduced legislation that would require

location verification of chips after they are sold.

Last week, Trump unveiled levies of 100% on China's

U.S.-bound exports and new export controls on "any and all

critical software" by November 1. On Sunday, China said the

latest tariffs were hypocritical.

(Reporting by Max A. Cherney in San Francisco; Editing by

Thomas Derpinghaus.)