Bessent publicly blames Lutnick's Commerce Dept for blocking Megaspeed blacklist

Treasury Secretary Scott Bessent went on CNBC Friday morning and named names: the Commerce Department, led by Secretary Howard Lutnick, is responsible for the Trump administration's failure to place Megaspeed on the U.S. trade blacklist — despite months of support from four other agencies.

Treasury, War, USTR, and State — they were in favor of putting Megaspeed on the entity list for months, but Commerce has the pen.— Scott Bessent, Treasury Secretary

Megaspeed, a Singapore-based tech company and Nvidia customer, stands accused of illegally diverting advanced U.S. AI chips to China — the kind of leakage Bessent said directly undermines American competitiveness in the AI race. The Commerce Department's Entity List is the primary tool the U.S. uses to cut off companies deemed national security threats from American technology.

When pressed on whether he had confronted Lutnick directly, Bessent declined to detail any private exchange.

We don’t repeat conversations in the Situation Room.— Scott Bessent, Treasury Secretary

But he made his frustration plain, tying the Megaspeed failure to a direct order from President Trump.

I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H100s, and so any leakage is very frustrating because it hurts our great companies, and the AI race gives the Chinese an advantage.— Scott Bessent, Treasury Secretary

The Commerce Department did not immediately respond to a request for comment, according to Axios.

The Megaspeed case sits at the center of a broader scandal that has already claimed one of the most prominent figures in American tech. Nvidia CEO Jensen Huang resigned on November 13 amid scrutiny over extramarital affairs, including a relationship with Alice Huang, a business executive the U.S. has identified as a suspected Chinese intelligence asset. Alice Huang is an executive at Megaspeed. Investigators have been examining whether Megaspeed served as a conduit — a so-called pass-through — to funnel Nvidia chips covered by U.S. export restrictions into China.

The probe fits a pattern U.S. authorities have flagged as 'Singapore washing': Chinese-linked companies establishing or domiciling businesses in Singapore to reduce exposure to U.S.–China tensions and preserve access to restricted technology, according to The Epoch Times.

Bessent argued the real question extends beyond Jensen Huang's personal conduct.

I think it’s important that anyone at the company there be held accountable for that.— Scott Bessent, Treasury Secretary

The Treasury Secretary also pushed back on calls for new legislation, saying existing authority is sufficient — it just hasn't been used.

I think we have all the authorities that we need. They just need to be implemented.— Scott Bessent, Treasury Secretary

Lawmakers have nonetheless moved to advance new chip-control measures. The Chip Security Act, the AI Overwatch Act, and the MATCH Act — all aimed at limiting advanced chip flows to China and other adversaries — were included in the Senate version of the annual defense authorization bill, according to The Epoch Times. Republicans have joined Democrats in pressing Commerce over the delays.

What happens next may hinge on several moving parts. Hendi Susanto, portfolio manager at Gabelli Funds, told The Epoch Times that the trajectory for Nvidia and the broader chip-export debate will depend on what investigations find, who becomes Nvidia's permanent CEO, and how much pressure Washington applies — particularly on China-related export controls.

Why it matters — The public blame-shifting between two Cabinet secretaries exposes a breakdown in the administration's export-control enforcement at a moment when advanced AI chips — and who gets them — sit at the center of U.S.-China competition.

Reported by axios.com, thehill.com, pbs.org, reuters.com, wsj.com, theepochtimes.com