Bessent Nvidia Scandal: Commerce Blamed for Failure
US Treasury Secretary Scott Bessent has blamed the Commerce Department for failing to blacklist Megaspeed, the Singapore company at the centre of the Bessent Nvidia scandal that forced Nvidia chief executive Jensen Huang to resign.
Speaking on CNBC on Friday, Bessent said the Treasury, the Defence Department, the US Trade Representative’s office and the State Department had backed adding Megaspeed to Washington’s trade blacklist “for months”.
“But Commerce has the pen,” Bessent said. “You will have to ask them about their internal processes.”
The remarks are a rare public rebuke of one cabinet department by another. Commerce is led by Secretary Howard Lutnick.
What Megaspeed is accused of
Megaspeed is suspected of helping Chinese firms get around US export controls by buying Nvidia chips for its data centres in South-East Asia and routing them to China. The company reportedly traded more than $4 billion worth of Nvidia chips over two years.
Bessent said he was frustrated because President Donald Trump had made it very clear that China should not receive any Nvidia chips above the H100 level.
“Any leakage is very frustrating because it hurts our great companies, and in the AI race gives the Chinese an advantage,” he said.
Its former director Alice Huang was this week identified in US media as an alleged Chinese intelligence asset who had a relationship with Jensen Huang. The two are not related. Beijing has denied the spying allegations.
Huang acknowledged an extramarital affair in a November 8 letter to Nvidia employees that did not name the woman involved, and resigned his position on Thursday. Nvidia’s board has said it will investigate, and three US Congress committee chairs have asked him to attend a closed-door briefing on November 18.
The Bessent Nvidia scandal turns back on Nvidia
Bessent said coverage of the affair had focused too much on Huang’s private life. “The story thus far has been on Jensen Huang’s personal foibles,” he said. “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?”
He questioned whether Nvidia had been selling to “what were obviously pass-through shell companies”. “I think it’s important that anyone at the company there be held accountable for that,” Bessent said, adding that there was “a lot of leakage in the system” and that the administration was constantly working to close that down.
The scandal matters well beyond Washington. Export controls on advanced chips shape the global supply of AI hardware, and any tightening will be felt by buyers and manufacturers across Asia, including Pakistan’s growing technology sector.
The rebuke comes as some of President Trump’s advisers are privately discussing whether Lutnick should be removed as Commerce Secretary, CNN reported. Bessent had already challenged Lutnick in a tense Situation Room meeting last week over the department’s reluctance to blacklist Megaspeed. CNN has sought comment from the Commerce Department.
Nvidia’s board is weighing Jensen Huang’s ouster. Huang stepped down as chief executive this week. Nvidia lost $1 trillion in market value as the scandal spread. China and the US have traded spy claims as the tech blockade tightens. Chip supply problems have already delayed the iPhone 18.
Frequently asked questions
Who is Scott Bessent blaming?
He blames the Commerce Department, led by Secretary Howard Lutnick, for failing to blacklist Megaspeed even though Treasury, Defence, the US Trade Representative and the State Department backed the move for months.
What is Megaspeed accused of?
Megaspeed is suspected of helping Chinese firms evade US export controls by buying Nvidia chips for data centres in South-East Asia and routing them to China. It reportedly traded more than $4 billion worth of Nvidia chips in two years.
Why did Jensen Huang resign?
Huang acknowledged an extramarital affair in a November 8 letter to Nvidia staff and resigned on Thursday. His former associate Alice Huang was identified in US media as an alleged Chinese intelligence asset. Beijing denies the spying claims.
What happens next?
Nvidia’s board has said it will investigate, and three US Congress committee chairs have asked Huang to attend a closed-door briefing on November 18.
Why does the scandal matter for chip buyers?
US export controls shape the global supply of advanced AI chips. Tighter enforcement and fresh blacklisting will affect availability and prices for buyers across Asia.
