WASHINGTON — Treasury Secretary Scott Bessent said Friday he was frustrated by the Commerce Department’s delay in imposing restrictions on Nvidia chip exports to a company run by an alleged Chinese spy.
Bessent said on CNBC that his department, along with the State and Defense Departments and the U.S. Trade Representative, had been in favor of adding Singapore-based Megaspeed International to an export control list for months, but that the Commerce Department was in charge of the matter.
“The business has the pen and you will have to ask them about their internal processes,” Bessent said. “My deputy has been insisting on this point for months.”
Bessent’s comments were an unusual public rebuke of another Cabinet member, Commerce Secretary Howard Lutnick. Commerce oversees U.S. government controls on exports of sensitive high-tech products. These comments come as Nvidia’s ties to Megaspeed are prominent in the industry. Nvidia CEO Jensen Huang resigns. Huang allegedly had an affair with Megaspeed CEO Alice Huang, who U.S. intelligence suspects of being a Chinese spy, the New York Times reported. China has denied the spying allegations.
Lutnick has come under increasing scrutiny due to his apparently close relationship with Huang. The former CEO of Nvidia is also close to President Donald Trump and recently visited at the White House on September 29 to discuss AI security. The Times reported Thursday that Lutnick had resisted imposing stricter limits on the sale of Nvidia’s most advanced chips to China. Chinese companies gained access to Nvidia’s chips through companies like Megaspeed, which reportedly purchased more than $4 billion worth of advanced semiconductors from Nvidia.
The split within Trump’s Cabinet reflects the widespread fallout from the scandal that engulfed Nvidiaone of the most valuable publicly traded companies in the world. Nvidia’s computer chips play a central role in the development of artificial intelligence, powering AI models such as those developed by OpenAI and Anthropic.
Last month, Trump awarded the then-Nvidia CEO a National Medal of Science. Earlier this week, Trump defended Huang, noting that “he said he had absolutely no idea that the person in question was a spy.”
Since the Biden administration, the US government has sought to restrict the sale of the most advanced AI computer chips to China in an effort to protect the lead of US technology companies. Still, China has at times fought back, creating controversy over how far the United States should push its restrictions.
The Commerce Department did not immediately respond to messages seeking comment.
Bessent declined to comment Friday on the Times report that he confronted Lutnick last week in the White House Situation Room about Megaspeed.
Separately, Axios reported this week that Lutnick received a classified memo this spring warning of Jensen Huang’s relationship with an alleged spy.
Last year, Megaspeed was accused of illegally shipping advanced Nvidia computer chips to 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 International in 2024. The bureau later turned the investigation over to the Justice Department.
A person familiar with the bureau’s investigation denied any involvement by Nvidia. The person was not authorized to discuss the matter publicly and spoke on condition of anonymity.
The Justice Department’s national security division is investigating whether Megaspeed violated export control laws in an investigation that will also include scrutiny of Alice Huang, according to a person familiar with the matter, The Associated Press reported Wednesday.
On Thursday, Megaspeed said it takes its obligation to comply with US export control laws “extremely seriously” – and is committed to working “constructively and transparently” with the US government.
Many members of Congress said they would investigate Lutnick’s actions and called on him to testify at the Capitol.
On Thursday, Oregon Sen. Ron Wyden and Massachusetts Rep. Richard Neal, both Democrats, wrote Lutnick a letter demanding that he preserve all documents related to decisions regarding Nvidia chip exports, pending an investigation. Wyden and Neal are the top Democrats on the Senate Finance and House Ways and Means committees, respectively.
Trump’s approval of Nvidia advanced chip exports to China “raises critical questions about whether and to what extent political considerations inappropriately influence policy decisions made by the administration.” Wyden and Neal wrote.
And the chairman of the House Foreign Affairs Committee wants Nvidia general counsel Tim Teter and a top Commerce Department official to appear before Congress.
Rep. Brian Mast, Republican of Florida and chairman of the panel, sent a letter this week to Jeff Kessler, the undersecretary for Commerce, Industry and Security, requesting a Dec. 2 hearing on computer chip smuggling and “reported interference by private companies in export control policies and enforcement investigations.”
Republican Sen. John Kennedy of Louisiana, a member of the Senate Banking Committee, urged Lutnick to hold a news conference to explain what he knew.
“The Commerce Department green-lighted the sale of $4 billion in advanced chips to the company of the spy Mr. Huang was having an affair with and I want to know why,” Kennedy said. “I want to know why the Commerce Department did this in light of export controls, and everything I’ve read indicates that this was a decision by the secretary himself.”
Kennedy added that Lutnick should testify before the Senate and should be subpoenaed if necessary.
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AP writers Didi Tang and Kevin Freking contributed to this report.
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