Bessent faults Commerce over Megaspeed as Lutnick faces Senate hearing

Treasury Secretary Scott Bessent has blamed the Commerce Department for delays in restricting Megaspeed International, a company U.S. authorities suspect of directing advanced Nvidia chips to China. Commerce Secretary Howard Lutnick has agreed to testify before the Senate Banking Committee on Dec. 10, CBS News reported, citing a U.S. official.

The scrutiny centers on why Singapore-based Megaspeed has not been added to the U.S. government’s Entity List, a step that would restrict its access to advanced AI chips, according to CBS News.

“Treasury, War, [the U.S. Trade Representative] and State, they were in favor of putting Megaspeed on the Entity List for months, but Commerce has the pen,” Bessent told CNBC. “And you will have to ask them about their internal processes.”

The U.S. government suspects Megaspeed of directing advanced Nvidia chips to China in circumvention of an export ban, CBS News reported. The BBC, citing The New York Times, said the Commerce Department investigated Megaspeed last year over suspicions it had smuggled chips into China. The BBC said Megaspeed was not on a list of firms that U.S. companies are prevented from working with and that it had contacted the company for comment.

The case has drawn attention since Nvidia chief executive Jensen Huang left the company after revelations that he had an affair with a former Megaspeed executive suspected of being a Chinese spy, according to the BBC. CBS News identified the former executive as Alice Huang and said she had previously led Megaspeed. Jensen Huang has been summoned to testify before the Senate Banking Committee, the BBC reported.

Bessent said he was “frustrated” by delays in listing Megaspeed and by reports of AI chips reaching China. “President Trump made it very clear that China should not receive any Nvidia chips above H100s, so any leakage is very frustrating because it hurts our great companies in the AI race, because it gives the Chinese an advantage,” he told CNBC.

He also questioned Nvidia’s oversight of its customers. “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 asked. “It’s important that anyone at the company there be held accountable for that.”

Republican Senator Jim Banks of Indiana told Fox News it appeared Commerce had used “loopholes” to allow some chip sales despite Trump’s direction not to permit them, CBS News reported. Senate Banking Committee Chairman Tim Scott said on X that reports about the matter raised “serious concerns about our national security and the protection of sensitive US technology,” according to the BBC.

Democratic lawmakers are also seeking answers. Representative Richard Neal and Senator Ron Wyden are investigating arrangements they say allowed Nvidia’s H200 chips to be sold to Chinese firms after the chips were brought from Taiwan to the United States for inspection and subjected to a 25% tariff, the BBC reported. Separately, the BBC said Democrats on key congressional committees had asked Lutnick and the Commerce Department to preserve records relating to decisions on Nvidia chip sales to Chinese companies, including communications with or about Nvidia and Huang.

Bessent declined to comment on reported tensions with Lutnick. The Commerce Department did not immediately respond to a CBS News request for comment.