Bessent blames Commerce Department for delay on Nvidia chip export restrictions

U.S. Treasury Secretary Scott Bessent said on CNBC that he was frustrated with the Commerce Department’s delay in placing restrictions on Nvidia chip exports to Singapore-based Megaspeed International.

Bessent said the Treasury, Defense and State departments and the Office of the U.S. Trade Representative had supported adding Megaspeed to the Commerce Department’s Entity List for months, but that the Commerce Department was in charge of the matter.

"Commerce has the pen, and you will have to ask them about their internal processes," Bessent said. "My deputy has been pushing this for months."

The comments were an unusually public rebuke of Commerce Secretary Howard Lutnick. Commerce oversees U.S. government controls over exports of sensitive, high-tech goods.

Bessent said President Trump had "made it very clear that China should not receive any Nvidia chips above H100s," referring to an older generation of Nvidia’s AI processors. He added that "any leakage is very frustrating because it hurts our great companies, and in the AI race gives the Chinese an advantage."

Megaspeed was previously led by Alice Huang, whom U.S. intelligence suspects is a Chinese spy. China has denied allegations of spying. Nvidia CEO Jensen Huang resigned on Thursday after admitting to an affair following scrutiny of his relationship with Alice Huang.

The Commerce Department did not immediately respond to requests for comment. Commerce Department spokeswoman Kristen Eichamer told CNBC that Bessent and Lutnick had "no such conversation" in the Situation Room, and on Friday said Lutnick "has proactively agreed to appear voluntarily before the Banking Committee to address their questions."

Lutnick has agreed to testify before the Senate Banking Committee on Dec. 10, according to a U.S. official cited by CBS News. The committee’s chairman, Republican Sen. Tim Scott of South Carolina, asked both Lutnick and Huang to appear.

On Thursday, Oregon Sen. Ron Wyden and Massachusetts Rep. Richard Neal, both Democrats, wrote Lutnick a letter demanding that he preserve all records related to decisions about Nvidia chip exports. They wrote that Trump’s approval of advanced Nvidia chip exports to China "raises critical questions about whether and to what extent political considerations are improperly influencing policy decisions made by the Administration."

Rep. Brian Mast, a Republican from Florida and chair of the House Foreign Affairs Committee, sent a letter to Jeff Kessler, undersecretary of commerce for industry and security, seeking a Dec. 2 hearing on computer chip smuggling and "reported interference by private companies into export control policies and enforcement investigations."

Republican Sen. John Kennedy of Louisiana urged Lutnick to hold a press conference to explain what he knew. "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," Kennedy said.

Megaspeed has said it takes its obligation to comply with American export control laws "extremely seriously" and that it was committed to working "constructively and transparently" with the U.S. government. Last year, Megaspeed was accused of illicitly shipping advanced Nvidia computer chips into China, but in December the company said there was "no evidence" of such exports.

Sources

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.