Treasury Secretary Scott Bessent blasted Commerce Secretary Howard Lutnick on Friday for stalling a blacklist on Singapore’s Megaspeed, a firm accused of funneling Nvidia AI chips to China. The criticism puts a cabinet‑level dispute over export controls squarely in the public eye.
Cabinet Rift Escalates
Bessent said the Treasury, the Department of War, the State Department and the U.S. Trade Representative had urged Commerce to add Megaspeed to the entity list for months, but the department, which holds the authority to act, had not.
“Commerce has the pen,” Bessent told CNBC’s “Squawk Box.” “You will have to ask them about their internal process.”
Senate Banking Committee Chairman Tim Scott (R‑SC) requested testimony from Lutnick and former Nvidia CEO Jensen Huang on Thursday as Congress intensifies its probe into the alleged chip diversion.
Bessent expressed frustration that President Donald Trump had made clear China should not receive chips more advanced than Nvidia’s H100 processors, saying any leakage undermines U.S. companies and aids China’s AI race.
He added that the real story is whether Nvidia knew its customers and implemented robust controls to stop technology from reaching unauthorized buyers.
“I think there is a lot of leakage in the system and we are constantly working to close that down,” he said. “The real story should be: Did NVIDIA know their client, and was there a robust effort at NVIDIA to make sure that there was no leakage and that they were selling to what were obviously pass‑through shell companies?”
Bessent said anyone at Nvidia responsible for failing to prevent such transfers should be held accountable.
The dispute centers on Megaspeed, a Singapore‑based data‑center company under investigation for allegedly diverting billions of dollars worth of Nvidia semiconductors to China, with authorities probing possible illegal smuggling.
Megaspeed executive Alice Huang, reportedly involved in a romantic relationship with former Nvidia CEO Jensen Huang, has been scrutinized for alleged ties to Chinese intelligence, though the Justice Department has not concluded she is a spy and China denies the claims.
The Commerce Department’s Bureau of Industry and Security oversees the export controls at the heart of the dispute, and Bessent said Treasury and other agencies had pushed for Megaspeed’s addition to the entity list for months.
His remarks followed reports that he confronted Lutnick in a White House Situation Room meeting last week over the delay, a claim Lutnick’s department denied and said the Commerce secretary had agreed to testify voluntarily before the Senate Banking Committee.
Scott asked Lutnick to appear at a public hearing on December 10 and summoned Huang for December 3, warning that subpoenas could be issued if he refused.
Current and former officials have questioned Lutnick’s handling of technology exports and his close relationship with Huang, but President Trump has voiced continued confidence in his Commerce secretary, according to a White House official.
