Treasury Secretary Scott Bessent publicly criticized the Commerce Department on Friday for not placing Megaspeed, a Singapore-based company, on the U.S. trade blacklist despite months of interagency support for the move.
In a CNBC interview, Bessent stated that the Treasury, Pentagon, State Department, and U.S. Trade Representative’s Office had all favored adding Megaspeed to the Commerce Department’s entity list for several months. However, he noted that the Commerce Department controls the final decision-making authority, stating, “Commerce has the pen.”
Bessent’s remarks came amid escalating scrutiny of Megaspeed’s alleged role in facilitating the diversion of Nvidia AI chips to China, bypassing U.S. export controls. The company is suspected of facilitating over $4 billion in chip transactions over two years, with some shipments allegedly rerouted to Chinese entities. Megaspeed’s former director, Alice Huang, has been identified in U.S. media reports as an alleged Chinese intelligence asset, though Beijing has denied the allegations.
The controversy has also drawn attention to Nvidia CEO Jensen Huang, who resigned this week following reports of an extramarital affair with Alice Huang. Bessent emphasized that the broader focus should remain on the export control violations rather than personal matters, stating, “The story thus far has been on Jensen Huang’s personal foibles. The real story here should be about leakage in the system.”
The Commerce Department’s entity list is a trade restriction tool used to block U.S. companies from exporting sensitive technologies to entities deemed national security threats. The department did not immediately respond to requests for comment on Bessent’s remarks.
President Donald Trump has previously directed agencies to tighten controls on Nvidia chip exports to China, specifically limiting shipments to models below the H100 tier. Bessent expressed frustration over continued leakage, stating that it undermines U.S. companies and gives China an advantage in the AI race.
The administration is reportedly reviewing internal processes to address vulnerabilities in the chip export system, with discussions underway about potential personnel changes, including the potential removal of Commerce Secretary Howard Lutnick, according to unnamed sources cited by Reuters.
Three U.S. congressional committee chairs have requested that Jensen Huang testify at a closed-door briefing on November 18, while Nvidia’s board has announced an internal investigation into the company’s vetting of Megaspeed and related allegations.