Treasury Secretary Scott Bessent said Friday that four federal agencies pushed for months to blacklist a Singapore-based Nvidia customer suspected of funneling advanced AI chips to China, but that the effort stalled inside the Commerce Department led by Secretary Howard Lutnick.
Speaking on CNBC’s “Squawk Box,” Bessent said Treasury, the War Department, the U.S. Trade Representative’s office, and the State Department all supported adding the firm, Megaspeed, to the government’s entity list over national security concerns — but that Commerce controlled the final decision.
“Treasury, War, USTR, and State were in favor of putting Megaspeed on the entity list for months, but Commerce has the pen,” Bessent said. “You will have to ask them about their internal processes.”
The dispute comes amid revelations that a Megaspeed executive, Alice Huang, suspected by officials of spying for China, had an extramarital affair with Nvidia CEO Jensen Huang, who is not related to her. Jensen Huang stepped down Thursday morning after 33 years running the company.
Bessent pressed for accountability at Nvidia itself, questioning whether the company vetted its customers closely enough to avoid shipping restricted technology to shell companies serving Beijing.
“Did Nvidia know their client?” Bessent asked. “Was there a robust effort at Nvidia to make sure that there was no leakage and that they weren’t selling to what were obviously pass-through shell companies [for China]? I think it’s important that anyone at the company there be held accountable for that.”
Multiple reports indicate Bessent raised the Commerce Department’s delay directly with Lutnick last week, and that Lutnick responded only by saying he would “look into it.” Asked on CNBC about that confrontation, Bessent declined to elaborate.
“We don’t repeat conversations in the Situation Room,” Bessent said.
The White House, for its part, is backing Lutnick. A White House official told the New York Post on Friday that the president retains full confidence in his commerce secretary, who Jensen Huang had previously called his closest ally in the administration.
“Secretary Lutnick is a champion of President Trump’s America First trade and tariff policies, which have secured almost 20 fair trade deals and trillions in manufacturing investments,” the official said. “President Trump maintains complete confidence in the secretary and his ability to carry out the position as the most transformative Commerce secretary in modern history.”
The episode has exposed a public rift between two of the administration’s top economic officials over how aggressively Washington polices the flow of advanced semiconductors to China, an issue central to national security debates over AI competition.
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