Bessent Blames Commerce for a Delay Restricting Nvidia Chip Exports

The facts come first below. My opinion follows in the section marked as opinion.

Treasury Secretary Scott Bessent said Friday he was frustrated with the Commerce Department's delay in placing restrictions on Nvidia chip exports to a company led by an alleged Chinese spy, the Associated Press reported. In a CNBC interview, Bessent said his department, along with the State and Defense departments and the U.S. Trade Representative, had favored adding Singapore-based Megaspeed International to an export control list for months, but that Commerce was in charge of the matter. "Commerce has the pen, and you will have to ask them about their internal processes," he said. "My deputy has been pushing this for months."

The remarks were an unusually public rebuke of a fellow Cabinet member, Commerce Secretary Howard Lutnick, whose department oversees controls on sensitive high-tech exports, the AP said. Reuters, also reporting on the Friday interview, said Treasury had favored putting Megaspeed on the U.S. entity list for months but that it was up to Commerce to act. Bessent told CNBC the administration was working to shut down "leakage" in the chip export system. Asked whether Congress needed to step in on export controls, he said, "We have all the authorities that we need. They just need to be implemented," Reuters reported.

Megaspeed has been in the spotlight after reports that Nvidia's then-chief executive, Jensen Huang, had an affair with former Megaspeed executive Alice Huang, whom U.S. authorities suspect of being a Chinese spy, Reuters said. The AP, citing The New York Times, reported that U.S. intelligence suspects Alice Huang is a Chinese spy, and that China has denied allegations of spying. The AP said Chinese firms have accessed Nvidia chips through companies like Megaspeed, which has reportedly purchased more than $4 billion worth of the firm's advanced semiconductors. The Commerce Department did not immediately respond to the AP's request for comment.

Bessent tried to shift the focus from Huang's personal life to the company's sales practices. He told CNBC, according to Reuters, "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 added, "It's important that anyone at the company there be held accountable for that." Reuters referred to Huang's exit this week; the AP called him the ex-Nvidia CEO. Last month, President Donald Trump awarded Huang a National Medal of Science, the AP said. Earlier this week, Trump defended him, noting that "he said he had absolutely no idea that the person in question was a spy."

The U.S. government has, since the Biden administration, sought to restrict sales of the most advanced AI chips to China, the AP reported. The Commerce Department's Bureau of Industry and Security began investigating Megaspeed in 2024 and later handed the inquiry to the Justice Department. A person familiar with the matter told the AP that the Justice Department's national security division is investigating whether Megaspeed violated export control laws, in an inquiry that will also include scrutiny of Alice Huang. On Thursday, Megaspeed said it takes its obligation to comply with American export control laws "extremely seriously" and was committed to working "constructively and transparently" with the U.S. government. Last year the company was accused of illicitly shipping advanced Nvidia chips into China, but in December it said there was "no evidence" of such exports, the AP reported. Bessent declined to comment Friday on a Times report that he confronted Lutnick last week in the White House Situation Room about Megaspeed.

Members of Congress from both parties have called for testimony and records. On Thursday, Sen. Ron Wyden of Oregon and Rep. Richard Neal of Massachusetts, the top Democrats on the Senate Finance and House Ways and Means committees, wrote Lutnick demanding that he preserve all records related to decisions about Nvidia chip exports, the AP said. Rep. Brian Mast, the Republican chairman of the House Foreign Affairs Committee, has sought a Dec. 2 hearing with Jeff Kessler, the undersecretary of commerce for industry and security, on chip smuggling and reported interference in export enforcement. Sen. John Kennedy, a Louisiana Republican on the Senate Banking Committee, said, "The Commerce Department greenlit $4 billion of sales of advanced chips to the company of the spy that Mr. Huang was having an affair with and I want to know why." He said Lutnick should testify and should be subpoenaed if necessary. The fight over advanced chips is unfolding as Trump prepares to meet Xi Jinping and Vladimir Putin in China on Thursday.

Opinion:

Export controls exist because advanced American chips are not party favors. China is a strategic rival, and Treasury, State, Defense, and the trade representative had already favored listing Megaspeed for months. A Cabinet secretary does not get to shrug and say Commerce has the pen while the question sits unanswered. The public is owed a straight account of who approved what, and when.

The personal scandal is not the main story, and it has not been proved in a courtroom that Alice Huang was a spy. China denies it. Investigations should be thorough and fair. What cannot be waved off is the possibility that high-end processors moved through pass-through companies toward Beijing. If Nvidia did not know its customer, that is a failure. If Commerce delayed a listing that other departments already supported, that is a failure too. The authorities already exist, as Bessent said. They need to be used.