Treasury chief Scott Bessent blames Howard Lutnick’s commerce department for not blacklisting Megaspeed as the Nvidia scandal widens

Bessent points at Commerce

The US treasury secretary, Scott Bessent, has blamed the commerce department led by Howard Lutnick for the fact that Megaspeed, a Singapore-based Nvidia customer, was never put on Washington’s blacklist of companies seen as a national security risk, the Guardian, the BBC and the South China Morning Post reported.

Megaspeed is associated with Alice Huang, the businesswoman suspected of being a Chinese spy whose reported affair with Jensen Huang (no relation) led to his resignation as Nvidia’s chief executive on Thursday. The Guardian said the company has bought billions of dollars of Nvidia chips in recent years. According to the New York Times, cited by the BBC, the commerce department had investigated it last year over suspicions that it was smuggling advanced AI chips into China.

Bessent told CNBC on Friday that several agencies “were in favour of putting Megaspeed on the entity list for months”, but that “Commerce has the pen”, adding that people would have to ask the department about its internal process.

“President Trump made it very clear that China should not receive any Nvidia chips above H100s, so any leakage is very frustrating because it hurts our great companies in the AI race, because it gives the Chinese an advantage.”

Scott Bessent, BBC News World(translated)

Pressure on Lutnick

White House officials are discussing whether Lutnick should be fired, the Associated Press reported, after it emerged that a US intelligence report about Jensen Huang’s relationship with the alleged spy had circulated among senior figures in the administration, according to the Guardian. The Republican senator John Cornyn told the Financial Times that “heads should roll”.

“Secretary Lutnick has proactively agreed to appear voluntarily before the banking committee to address their questions.”

Kristen Eichamer, Lutnick’s spokesperson, The Guardian World(translated)

The BBC called Bessent’s comments a rare case of internal debate in the Trump administration spilling into public view, noting that the two men reportedly competed for the treasury job in 2024 and clashed over tariffs last year.

Congress turns to the chips

Richard Neal and Ron Wyden, the ranking members of the House Ways and Means and Senate Finance committees, have opened investigations into how Nvidia was allowed to sell its H200 chips to Chinese firms, the BBC reported. Under the arrangement the chips had to be imported from Taiwan into the US for inspection first, and a 25% tariff was charged on them.

“Trump’s use of the statute appears to have done the opposite, undermining US national security and putting Americans at risk.”

Richard Neal and Ron Wyden, BBC News World(translated)

The House speaker, Mike Johnson, said there was a growing consensus in Congress on limiting chip exports to China, and Reuters reported that Chinese AI companies were trying to secure Nvidia chip capacity outside China, the Guardian said. The South China Morning Post noted that the row comes days before Donald Trump and Xi Jinping are expected to meet in Shenzhen. Nvidia is being run on an interim basis by its chief financial officer, Colette Kress.