Bessent criticizes Department of Commerce for failing to blacklist company linked to Nvidia scandal
These statements constitute an unusual public rebuke from one cabinet department to another. The Department of Commerce is headed by Secretary Howard Lutnick.
Treasury Secretary Scott Bessent
Treasury Secretary Scott Bessent on Friday blamed the Department of Commerce for failing to blacklist Megaspeed, the Singapore-based company at the center of a scandal that led to the resignation of the CEO of Nvidia, Jensen Huang.
Speaking to CNBC, Bessent stated that the Treasury Department, the Department of Defense, the Office of the U.S. Trade Representative, and the State Department had supported the inclusion of Megaspeed on Washington's trade blacklist "for months."
"But [the Department of] Commerce has the pen," Bessent said. "You will have to ask them about their internal process."
He said he felt "frustrated" because President Donald Trump "made it very clear that China should not receive any Nvidia chips higher than the H100 series."
"Any leakage is very frustrating because it hurts our great companies and, in the A.I. race, gives the Chinese an advantage," he said.
These statements constitute an unusual public rebuke from one cabinet department to another. The Department of Commerce is led by Secretary Howard Lutnick.
Megaspeed is suspected of helping Chinese companies circumvent U.S. export controls by purchasing Nvidia chips for their data centers in Southeast Asia and shipping them to China.
According to reports, the company negotiated Nvidia chip deals worth more than $4 billion over a two-year period.
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This week, U.S. media outlets identified its former director, Alice Huang, as an alleged Chinese intelligence agent who was in a relationship with Jensen Huang. The two are not related. Beijing has denied the espionage allegations.
Jensen Huang admitted to having had an extramarital affair in a letter sent to Nvidia employees on Nov. 8, in which he did not mention the name of the woman involved, and he resigned from his position on Thursday.
Nvidia's board of directors has stated that it will investigate the matter, and the chairs of three U.S. congressional committees have asked the company to attend a closed-door briefing on November 18.
Bessent stated that coverage of the case had focused too much on Huang's private life.
"The story has been thus far of 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?"
He questioned whether Nvidia had been selling to "what were obviously pass-through shell companies."
"It's important that anyone at the company there be held accountable for that," Bessent said.
He said there were "a lot of leakage in the system" and that the administration was "constantly working to close that down."
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