Driving the news: At a White House Situation Room meeting Thursday after the midterm elections, Bessent pressed Lutnick on why Megaspeed had not been added to the Commerce Department’s Entity List, to which Lutnick responded that he would “look into it.”
- Commerce Deputy Secretary Jeff Kessler has also been repeatedly warned about Megaspeed during congressman meetings.
- But Kessler deferred to Lutnick, saying “that’s a decision that’s up to the secretary.”
- Sources told Axios that Lutnick spent the last year “rolling back” efforts by other administration officials to hold Megaspeed — a company accused of illegally diverting U.S. chips to China — accountable due to fears of an escalating trade war with China.
- Spokespeople for Treasury and Commerce could not immediately be reached for comment.
Catch up quickly: The Commerce Department is increasingly at the center of scrutiny over the Trump administration’s handling of an intelligence memo overseen by State Department head Marco Rubio.
- Lutnick was among the officials who received the report in May, before a trip to China, Axios first reported.
- On Tuesday, the New York Times reported that Deputy Commerce Secretary Kessler abruptly halted an investigation into Megaspeed after Nvidia intervened.
- The Financial Times reported that the ministry was delaying efforts to blacklist Megaspeed, despite pressure from several US government agencies.
Inside the room: White House and intelligence officials have been pressing Lutnick and his top advisers to take action against Megaspeed since fall 2025, sources told Axios. But they refused, so Bessent spoke on Thursday.
- “How come Megaspeed isn’t on the Entity List?” Bessent asked Lutnick, according to a source briefed on the meeting.
- Lutnick stammered at first, according to sources, then replied: “‘I don’t know.’ I’ll think about it.”
- One source, who has extensive experience with the chip controversy, said the response was “bullshit” because Lutnick had resisted taking action since personally receiving a memo, written by National Security Advisor and Secretary of State Marco Rubio, that outlined Megaspeed’s problems.
The big picture: Nvidia’s AI chips provide the computing power needed to develop cutting-edge artificial intelligence, including systems that can transform warfare and cyberattacks.
Editor’s note: This is a breaking news story and will be updated.
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