Treasury chief blames Commerce Department for delay in restricting Nvidia chip exports

Treasury Secretary Scott Bessent said Friday he is frustrated with the Commerce Department's delay in placing restrictions on Nvidia chip exports to Megaspeed International, a Singapore-based company led by a woman US intelligence suspects of spying for China.

Speaking on CNBC, Bessent said the Treasury, State and Defense departments, along with the US Trade Representative, had favored adding Megaspeed to an export control list for months, but that the decision belongs to Commerce. "Commerce has the pen, and you will have to ask them about their internal processes," he said. "My deputy has been pushing this for months."

The remarks amounted to an unusually public rebuke of a fellow Cabinet member, Commerce Secretary Howard Lutnick, whose department oversees US controls on exports of sensitive, high-tech goods.

The dispute comes amid fallout from the resignation of Nvidia CEO Jensen Huang, who allegedly had an affair with Megaspeed CEO Alice Huang, no relation, whom US intelligence suspects is a Chinese spy, The New York Times has reported. China has denied the spying allegations. Lutnick has faced growing scrutiny over his reportedly close relationship with Jensen Huang, who is also close to President Donald Trump and visited the White House on Sept. 29 to discuss AI safety. The Times reported Thursday that Lutnick resisted placing tighter limits on sales of Nvidia's more advanced chips to China. Chinese firms have accessed the chips through companies such as Megaspeed, which has reportedly purchased more than $4 billion worth of Nvidia's advanced semiconductors.

Nvidia, one of the most valuable publicly traded companies in the world, makes chips that play a central role in the buildout of artificial intelligence, powering AI models developed by OpenAI and Anthropic. Trump awarded Huang a National Medal of Science last month, and earlier this week the president defended him, noting that "he said he had absolutely no idea that the person in question was a spy."

The US government has sought since the Biden administration to restrict sales of the most advanced AI chips to China to protect the lead of US technology companies, though China has at times retaliated. Bessent declined to comment Friday on a Times report that he confronted Lutnick last week in the White House situation room over Megaspeed. Axios separately reported this week that Lutnick received a classified memo this spring warning about Jensen Huang's relationship with a suspected spy. The Commerce Department did not immediately respond to messages seeking comment.

Megaspeed was accused last year of illicitly shipping advanced Nvidia chips into China, but in December the company said there was "no evidence" of such exports. The Commerce Department's Bureau of Industry and Security began investigating Megaspeed in 2024 and later handed the case to the Justice Department. A person familiar with the bureau's investigation, who was not authorized to speak publicly, denied any intervention from Nvidia. The Associated Press reported Wednesday that the Justice Department's national security division is investigating whether Megaspeed violated export control laws, in an inquiry that will also include scrutiny of Alice Huang. Megaspeed said Thursday it takes its obligation to comply with American export control laws "extremely seriously" and is committed to working "constructively and transparently" with the US government.

Numerous members of Congress have said they will investigate Lutnick's actions and have called for him to testify. On Thursday, Oregon Sen. Ron Wyden and Massachusetts Rep. Richard Neal, the top Democrats on the Senate Finance and House Ways and Means committees, wrote Lutnick demanding he preserve all records related to decisions about Nvidia chip exports. Trump's approval of advanced Nvidia chip exports to China "raises critical questions about whether and to what extent political considerations are improperly influencing policy decisions made by the Administration," they wrote.

Rep. Brian Mast, a Florida Republican who chairs the House Foreign Affairs Committee, sent a letter this week to Jeff Kessler, undersecretary of commerce for industry and security, seeking a Dec. 2 hearing on chip smuggling and "reported interference by private companies into export control policies and enforcement investigations." Mast wants Nvidia's general counsel, Tim Teter, and a senior Commerce Department official to appear before Congress.

Sen. John Kennedy, a Louisiana Republican on the Senate Banking Committee, urged Lutnick to hold a press conference explaining what he knew. "The Commerce Department greenlit $4 billion of sales of advanced chips to the company of the spy that Mr. Huang was having an affair with and I want to know why," Kennedy said, adding that everything he had read indicated the decision was made by the secretary himself. Kennedy said Lutnick should testify before the Senate and should be subpoenaed if necessary.