Bessent Blames Commerce for Megaspeed Delay as Nvidia Chip Scandal Widens

US Treasury Secretary Scott Bessent has publicly blamed the Commerce Department for failing to blacklist Megaspeed, the Singapore-based cloud computing firm at the centre of the scandal over advanced Nvidia chips reaching China, exposing an open split inside President Donald Trump's cabinet.

Speaking on CNBC's "Squawk Box" on Friday, November 13, Bessent said his department, the Pentagon, the US Trade Representative's office and the State Department had all favoured adding Megaspeed to the Commerce Department's Entity List for months — but that only Commerce could take the step.

"Treasury, War, USTR, and State were in favour of putting Megaspeed on the entity list for months, but Commerce has the pen," Bessent said. "Commerce BIS has the pen, and you will have to ask them about their internal processes."

Commerce "has the pen"

Bessent was blunt about where the authority sits. Treasury's Office of Foreign Assets Control, he said, has no control over export decisions. "This is a BIS decision," he said, referring to the Commerce Department's Bureau of Industry and Security, "and perhaps the FTC could put something on their restrictive list."

The Entity List is Washington's main tool for cutting off access to American technology. Once a company is placed on it, US suppliers must obtain a Commerce Department licence before exporting controlled products to it. Megaspeed, despite more than a year of investigation over suspicions it smuggled advanced Nvidia AI chips into China, has never been added.

Asked whether he had confronted Commerce Secretary Howard Lutnick directly over the delay, Bessent declined to recount conversations held in the Situation Room. Axios had earlier reported that Bessent challenged Lutnick in a White House meeting over why he had repeatedly blocked export controls, including action targeting Megaspeed. A Commerce Department spokesperson denied that the conversation took place.

The White House, meanwhile, said Trump continues to have complete confidence in Lutnick, even as the controversy deepened.

Questions for Nvidia

Bessent also turned the focus onto Nvidia itself, questioning how well the chipmaker vetted one of its biggest customers for advanced AI chips.

"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?" he said. "It's important that anyone at the company there be held accountable for that."

He said the administration was working to shut down "leakage" in the chip export system, and that Trump had made the limits clear. "I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H100s," Bessent said.

Asked whether he believed Nvidia's most advanced chips had flowed into China through Megaspeed, he was direct: "I think there are a lot of holes in the system, and we are constantly working to plug them."

Asked whether Congress needed to step in to tighten export controls, Bessent said no new powers were required. "We have all the authorities that we need. They just need to be implemented."

The Megaspeed affair

Megaspeed has been in the spotlight since reports that former Nvidia chief executive Jensen Huang had an affair with Alice Huang, a former Megaspeed executive whom US authorities suspect of being a Chinese spy. Huang resigned as Nvidia chief executive this week, ending a tenure of more than three decades, and the scandal has since widened into a political fight over who in Washington allowed advanced chips to keep flowing to China.

Reports describe Megaspeed as one of Nvidia's largest customers for advanced AI chips, with purchases running into the billions of dollars. CBS News reported that the Commerce Department's Bureau of Industry and Security opened an investigation in 2024 into whether Nvidia chips sold to Megaspeed were being redirected to China, a case later transferred to the Justice Department.

Separately, Reuters reported that Huang misled Nvidia's top lawyer about the affair, and US lawmakers have opened their own inquiries. Democrats have launched an investigation into the proposed H200 chip sales to China, while the Senate Banking Committee has sought testimony from Lutnick and asked Huang to appear voluntarily at a public hearing on December 3.

According to reports, no new company has been added to the Entity List since October 2025 — the longest gap in more than a decade — even as the administration approved action against suspected chip diverters on several occasions this year.

What happens next

December is shaping up as the first formal accounting. Lutnick is due to testify before the Senate Banking Committee, and Huang has been asked to appear at a public hearing examining reports about Nvidia's semiconductor exports and their national security implications.

For now, Megaspeed remains off the Entity List, and Bessent's public intervention has made the question of why — and who stopped it — one of the most awkward in the administration. As he put it on Friday, the authorities already exist. The open question is whether they will be used.

Read more on Innopark IT: Jensen Huang misled Nvidia's top lawyer about Alice Huang affair, Reuters reports | Banned Nvidia AI chips found at Shanghai facility linked to Alice Huang | Democrats investigate Trump-Nvidia H200 chip sales to China | DOJ probes whether Alice Huang helped smuggle Super Micro AI servers to China

Sources

• Reuters — "Bessent says Treasury favored limits on Megaspeed" (November 13, 2026)
• BusinessToday — "Nvidia chip row escalates: Bessent throws Howard Lutnick under the bus over Megaspeed" (November 14, 2026)
• Daily Caller — "Bessent Throws Lutnick Under The Bus On Trump's Chip Export Fiasco" (November 13, 2026)
• Tribune India — "Difference in Trump cabinet over Chinese spy scandal, Bessent points finger at Lutnick for Megaspeed clearance" (November 13, 2026)
• BigGo Finance — "Bessent Takes Aim at Commerce Department for Stalling Megaspeed Sanctions" (November 14, 2026)