Bessent Blames Commerce Over Nvidia Chip Leakage to China

US Treasury Secretary Scott Bessent on Friday blamed the Commerce Department for failing to blacklist Megaspeed, the Singapore-based company at the centre of the scandal that led Nvidia chief executive Jensen Huang to resign, AFP reported.

Speaking on CNBC, Bessent said the Treasury, the Defense Department, the State Department and the office of the US Trade Representative had backed adding Megaspeed to the government’s trade blacklist for months, but that “Commerce has the pen”. He said questions about the department’s internal processes should go to Commerce, which is led by Howard Lutnick. AFP described the remarks as a rare public rebuke of one cabinet department by another.

Leakage of advanced chips

Bessent said he was frustrated because President Donald Trump had made clear that China should not receive any Nvidia chips more advanced than the H100. He said any leakage hurt American companies and gave China an advantage in the AI race, adding that there was considerable leakage in the system and that the administration was constantly working to close it down.

He argued that coverage so far had focused on Huang’s personal life, and that the real question was whether Nvidia knew its client and made a robust effort to stop chips going to what he called obvious pass-through shell companies. He said anyone at the company responsible should be held accountable.

The Megaspeed case

According to AFP, Megaspeed is suspected of helping Chinese firms get around US export controls by buying Nvidia chips for data centres in Southeast Asia and routing them to China. The company reportedly traded more than US$4 billion worth of Nvidia chips over two years. Megaspeed has denied the diversion allegations, The Next Web reported.

Alice Huang, a former Megaspeed director, was identified in US media this week as an alleged Chinese intelligence asset, an allegation Beijing has denied. She had a relationship with Jensen Huang, who acknowledged an extramarital affair in a November 8 letter to employees and resigned on Thursday. The two are not related.

The Next Web, citing comments from an Nvidia spokesman to the Wall Street Journal, said the chipmaker banned all sales and shipments to Megaspeed in June 2025. It also cited a New York Times report that Commerce halted its Megaspeed probe in 2025 after Nvidia’s lawyer contacted its agents.

Asked about an Axios report that he had confronted Lutnick over Megaspeed in the White House Situation Room, Bessent said: “We don’t repeat conversations in the Situation Room.” A Commerce spokeswoman said no such conversation took place, and a department spokesperson told Semafor that Treasury and Commerce have a great working relationship, according to The Next Web.

What’s next

Nvidia’s board has said it will investigate, and three US congressional committee chairs have asked Huang to attend a closed-door briefing on November 18, AFP reported. The Next Web said the Senate Banking Committee has asked Huang and Lutnick to testify in December. The decision on adding Megaspeed to the entity list remains with Commerce.

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