Bessent Calls Out Commerce Over Megaspeed Scandal as Nvidia Faces Congressional Scrutiny

Treasury Secretary Scott Bessent publicly put responsibility on Howard Lutnick's Commerce Department on Friday for delays in restricting Nvidia customer Megaspeed, saying several administration agencies had backed action for months as concerns mounted over advanced American chips reaching China.

Speaking on CNBC's "Squawk Box," Bessent said Treasury and other departments supported adding the Singapore-based company to the government's entity list. Commerce, however, controls the process.

"You will have to ask them about their internal processes," he said. His comments exposed tensions within President Donald Trump's administration as officials face questions about chip export enforcement, Nvidia's customer screening and the circumstances surrounding co-founder Jensen Huang's resignation as chief executive.

Bessent said the departments of Treasury, Defense and State, along with the Office of the U.S. Trade Representative, "were in favor of putting Megaspeed on the entity list for months."

The designation would subject transactions involving the company to additional export restrictions. Asked whether delays frustrated him, Bessent pointed to Trump's instructions on limiting China's access to advanced Nvidia processors.

"I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H100s," he said. "And so any leakage is very frustrating," Bessent added, saying it undermines American companies competing in artificial intelligence and gives China an advantage.

His remarks followed an Axios report that he confronted Lutnick during a White House Situation Room meeting last week about the failure to restrict Megaspeed. Axios reported that Lutnick had repeatedly resisted efforts to crack down on companies suspected of diverting Nvidia chips to China.

Commerce spokeswoman Kristen Eichamer denied Wednesday that the reported conversation occurred. Bessent declined Friday to describe the meeting. "We don't repeat conversations in the Situation Room," he said.

The dispute has become intertwined with scrutiny of Huang's relationship with Alice Huang, a Megaspeed executive whom U.S. intelligence reportedly identified as a Chinese spy. Jensen Huang resigned Thursday after acknowledging an affair.

Megaspeed has denied wrongdoing and said it cooperated with U.S. inspections. China has rejected the espionage allegations. Bessent argued that attention should focus on Nvidia's business practices and whether its safeguards prevented restricted chips from reaching unauthorized buyers.

"The story has been thus far on Jensen Huang's personal foibles," he said. "The real story here 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?"

His comments raised questions about customer vetting without establishing that Nvidia knowingly violated export restrictions. "I think it's important that anyone at the company there be held accountable for that," Bessent said.

Congressional scrutiny is also expanding. Senate Banking Committee Chairman Tim Scott, R-S.C., said Thursday that Huang and Lutnick had been asked to testify next month. Eichamer said Friday that Lutnick had agreed to appear voluntarily before the committee. Commerce did not respond to CNBC's request for comment on Bessent's remarks.

House committees overseeing China, intelligence and foreign affairs have separately requested a closed-door briefing with Huang on Dec. 1 and an interview with Nvidia general counsel Tim Teter on Dec. 2.

House Foreign Affairs Chairman Brian Mast, R-Fla., also requested testimony from Commerce Undersecretary Jeff Kessler on Dec. 3. That hearing would examine chip smuggling, adversaries' military use of advanced AI processors and alleged private-sector interference in export policy and investigations.

Asked whether Megaspeed served as a conduit for Nvidia's most advanced chips, Bessent stopped short of confirming specific shipments. "I think that there is a lot of leakage in the system," he said, "and we are constantly working to close that down."