Bessent blames US Commerce Dept over lack of export controls for Nvidia partner Megaspeed

• Scott Bessent said Treasury, Defence, State and the US Trade Representative backed blacklisting Megaspeed, but the Commerce Department did not act because “Commerce has the pen”.
• Critics say Commerce Secretary Lutnick stalled export controls on Nvidia chips to China. Senators John Curtis and Richard Blumenthal attacked his role and called for tougher action.
• The scandal has raised fears of weak checks at Nvidia and possible chip leakage to China. Bessent said the government has enough powers and must use them.

WASHINGTON - US Treasury Secretary Scott Bessent said on Nov 13 that four government agencies favoured putting Megaspeed, the Singapore-based company at the heart of the Nvidia scandal, on a trade black list but not the Commerce Department that was in charge.

Bessent said Treasury, Pentagon, the State Department and the US Trade Representative’s Office had favoured adding Megaspeed to the Commerce Department entity list for months.

“But Commerce has the pen,” Bessent told CNBC’s Squawk Box. “You will have to ask them about their internal processes.”

The Commerce Department’s so-called entity list is a trade blacklist of groups connected to China that US officials say pose national security risks. The department did not immediately return a request for comment.

There is growing criticism of Lutnick’s role in overseeing export controls on US chips to China. Lutnick reportedly stalled President Donald Trump’s crackdown on companies suspected of diverting Nvidia’s ‌chips to China, media outlets reported this week.

Republican Senator John Curtis said on Nov 13 that “Secretary Lutnick’s reported stalling on export controls raises the question of whether the Commerce Department is acting in the best interests of the American people”.

Democratic Senator Richard Blumenthal said on Nov 13: “Lutnick must go. His malign self-enriching malfeasance shows the costs of corruption – putting personal profit above public interest. Making powerful Nvidia chips available to China through an apparent spy undercut both national security & economic competitiveness.”

Megaspeed has been in the spotlight following reports that Jensen Huang had an affair with former Megaspeed executive Alice Huang, whom US authorities suspect of being a Chinese spy.

Reuters reported on Nov 12 that senior White House officials are discussing whether Lutnick should be pushed out amid a spy scandal surrounding Nvidia’s now-former CEO Jensen Huang.

Bessent added that the administration was working to shut down “leakage” in the chip export system, and pointed to questions over how well Nvidia vetted its partner company amid CEO Jensen Huang’s exit this week, which sent shockwaves across the AI industry.

US lawmakers have called for tougher restrictions on China’s access to advanced AI chips in the wake of the scandal, which has threatened to implicate some Trump administration members, including Lutnick, amid growing questions over the administration’s oversight of chip sales to China.

“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?“ Bessent said.

“It’s important that anyone at the company there be held accountable for that.”

Asked if Congress needed to step in to act on export controls, he said: “We have all the authorities that we need. They just need to be implemented.”

Senate Banking Committee chair Tim Scott on Nov 12 asked Lutnick to testify. REUTERS