US Senator Bennet demands answers on China AI chip diversion probe
Synopsis
Key Takeaways
US Senator Michael Bennet has formally demanded that the Trump administration provide written answers by 24 November regarding the suspected diversion of advanced American artificial intelligence chips to China, escalating congressional pressure over a case involving cloud services firm Megaspeed. The Colorado Democrat, who serves on the Senate Intelligence Committee, directed his requests to four senior officials in a letter released on Wednesday.
Who Received the Demands
Bennet addressed his letter to Commerce Secretary Howard Lutnick, Attorney General Todd Blanche, Secretary of State Marco Rubio, and Director of National Intelligence Jay Clayton. Among his key questions: whether Commerce would restrict shipments to Megaspeed or place the company on its Entity List — a designation that would effectively block it from receiving US-origin technology.
'Our export control regime must be able to identify and curtail entities actively seeking to evade those controls,' Bennet wrote in the letter.
What Bennet Is Asking
Beyond the Megaspeed question, the senator sought clarity on coordination with Singapore, Malaysia, and Indonesia — jurisdictions that have reportedly served as transit points in suspected chip-diversion networks. He also requested measures to address Chinese access to restricted technology through overseas subsidiaries and remotely accessible computing services, a channel that has drawn growing scrutiny from regulators.
Citing reporting by The New York Times, Bennet additionally asked for an update on a Justice Department investigation that was reportedly initiated by Commerce's Bureau of Industry and Security (BIS). BIS has defended its handling of the matter: 'BIS conducts all enforcement strictly by the book,' a spokesman told The Wall Street Journal.
Megaspeed's Position and Nvidia's Move
Megaspeed has denied any involvement in illegal chip transfers, asserting in a prior statement that internal reviews found no evidence of illicit activity. 'We operate fully within the bounds of all applicable export control regulations and maintain the highest standards of legal and ethical conduct,' the company said. Notably, that statement predates Bennet's letter and is not a direct response to his latest demands.
Separately, Nvidia confirmed it halted sales and shipments to Megaspeed in June 2025, with the prohibition reportedly still in effect according to The Wall Street Journal. An Nvidia spokesman told the newspaper that the company obtained Commerce's permission for parts and replacement components supplied after the cutoff.
Megaspeed describes itself as a specialised cloud provider offering access to Nvidia graphics processors, virtual servers, storage, and networking — including computing resources for machine learning and AI inference.
Internal Administration Rift
The congressional demand arrives against a backdrop of reported disagreement within the administration over how to handle the Megaspeed case. CNN reported on Wednesday, citing two people familiar with the matter, that Treasury Secretary Scott Bessent challenged Lutnick during a Situation Room discussion the previous week over Commerce's apparent reluctance to designate Megaspeed a potential national-security threat. The reported friction underlines deeper tensions between trade and security priorities within the administration.
What Happens Next
The 24 November deadline Bennet has set will be an early test of how the administration responds to bipartisan pressure on export controls — an area where both parties have broadly agreed China poses a strategic threat. Depending on the administration's response, Congress could move toward legislative action to tighten BIS's enforcement powers or expand the Entity List criteria.