- Treasury Secretary Scott Bessent said Friday that his department and others in the Trump administration have long supported restrictions on Megaspeed, the Singapore-based firm at the center of former Nvidia CEO Jensen Huang’s scandal, CNBC reported. The departments of Treasury, Defense and State and the Office of the U.S. Trade Representative “were in favor of putting Megaspeed on the entity list for months,” Bessent told CNBC’s “Squawk Box,” but “the Commerce Department is in charge, and you will have to ask them about their internal processes.”
- Bessent said he is “frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H100s.” “Any leakage is very frustrating” because it “hurts our great companies in the AI race [and] gives the Chinese an advantage,” he said. Asked whether Nvidia’s highest-level processors have reached China through Megaspeed, he said “there is a lot of leakage in the system” and that “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?”
- The comments followed an Axios report that Bessent, in the White House Situation Room last week, asked Commerce Secretary Howard Lutnick why he had resisted export controls, especially on Megaspeed, and that Lutnick has “repeatedly stood in the way” of cracking down on firms suspected of diverting Nvidia chips to China. Commerce spokeswoman Kristen Eichamer said Wednesday that Bessent and Lutnick had “no such conversation” in the Situation Room. Asked about the report, Bessent said, “We don’t repeat conversations in the Situation Room.” The Commerce Department did not respond to CNBC’s request for comment on his Friday remarks.
- Lutnick has agreed to appear voluntarily before the Senate Banking Committee after Chairman Tim Scott, R-S.C., asked him to testify on Dec. 10, CNBC said, citing a Commerce statement. Scott asked Huang to appear on Dec. 3. Huang has also been asked to sit for a closed-door briefing on Dec. 1 before the House China, intelligence and foreign affairs committees, with Nvidia general counsel Tim Teter asked to appear on Dec. 2 and Commerce under secretary Jeffrey Kessler on Dec. 3. CNBC reported that Megaspeed has bought more than $4.8 billion of advanced Nvidia AI chips over the past two years.
What Happened?
Bessent’s on-the-record split with Commerce turns an export-control dispute into an intra-administration fight, days after Huang resigned and as lawmakers in both parties demand testimony. By naming Treasury, Defense, State and the USTR as having favored an entity-list move “for months,” he placed the delay at Lutnick’s door without confirming the Situation Room account. His question about whether Nvidia knew it was selling to “pass-through shell companies” also shifts attention from Huang’s personal conduct to the company’s compliance systems, a line that Senate and House investigators are already pursuing.
Why It Matters?
For Nvidia, the policy risk is now as visible as the leadership risk. An entity-list action against Megaspeed, or a tighter reading of the H100 ceiling Bessent invoked, would hit a disclosed $4.8 billion customer relationship and could spill into other intermediaries. For the administration, public disagreement between the Treasury and Commerce secretaries, just before a planned Trump-Xi meeting, complicates the White House’s message on China chip policy.
What’s Next?
The calendar is concrete: Huang’s House briefing on Dec. 1, Teter on Dec. 2, Kessler and Huang’s Senate date around Dec. 3, and Lutnick on Dec. 10. Watch whether Commerce answers Bessent’s entity-list account, whether Megaspeed is added to the list, and whether Nvidia, on its earnings call or in testimony, addresses how it vets end customers. Any new restriction on chips “above H100s” would be the market signal that this fight has moved from rhetoric to rules.
Affected Tickers and Coins: NVDA
