Treasury Secretary Scott Bessent blamed the Commerce Department on Friday for failing to blacklist the Singapore-based data center firm Megaspeed over national security concerns.
The remarks exposed deep divisions within the Trump administration following the resignation of Nvidia CEO Jensen Huang. Bessent stated on CNBC’s “Squawk Box” that multiple federal bodies favored placing Megaspeed on the trade blacklist known as the entity list.
Those departments included Treasury, Defense, State, and the U.S. Trade Representative, according to The New York Times. Bessent said the Commerce Department held the authority to enact the sanctions.
“Commerce…has the pen. You would have to ask them about their internal processes,” Bessent said on CNN.
The public dispute followed reports of a tense Situation Room meeting last week. Bessent reportedly challenged Commerce Secretary Howard Lutnick over export controls regarding Megaspeed.
“I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H100s,” Bessent told CNBC.
Pressure on Lutnick and Congressional Inquiries
Senior White House officials discussed whether Lutnick should be dismissed from his post amid the fallout, CNN reported. President Donald Trump also fielded calls from advisers raising concerns about the Commerce Secretary.
The White House issued a statement on Thursday maintaining complete confidence in Lutnick. The Commerce Department did not respond to requests for comment regarding Bessent’s remarks, CNBC noted.
Meanwhile, Capitol Hill launched formal inquiries into the matter. U.S. Senate Banking Committee Chairman Tim Scott sent letters on Thursday asking Lutnick and Jensen Huang to testify.
“Recent reports raise serious concerns about our national security and the protection of sensitive U.S. technology,” Scott wrote on X, as reported by The Globe and Mail.
Scott stated he would consider subpoenaing Huang if he failed to appear voluntarily. House Foreign Affairs Chairman Brian Mast told reporters on Thursday that congressional staff spoke with Nvidia about a closed-door briefing.
Scrutiny Over Chip Leakage
The scrutiny intensified after revelations regarding Jensen Huang’s relationship with Alice Huang, a Megaspeed employee suspected by U.S. authorities of intelligence connections to China. Jensen Huang stepped down from Nvidia on Thursday.
China denied that Alice Huang is a spy. U.S. Attorney General Todd Blanche stated on Thursday that the Justice Department had not reached a final conclusion on the matter, according to The Globe and Mail.
Bessent argued that the wider focus should remain on supply chain enforcement rather than personal conduct. He pointed to potential pass-through operations used to route high-end processors abroad.
“I think that there is a lot of leakage in the system, and we are constantly working to close that down,” Bessent said on CNBC.
| Official / Executive | Role | Recent Action |
|---|---|---|
| Scott Bessent | Treasury Secretary | Publicly blamed Commerce for export control delays on CNBC. |
| Howard Lutnick | Commerce Secretary | Faced administration scrutiny and agreed to appear before the Senate Banking Committee. |
| Jensen Huang | Former Nvidia CEO | Resigned on Thursday amid fallout over ties to Megaspeed employee Alice Huang. |
| Tim Scott | U.S. Senate Banking Committee Chairman | Requested testimony from Lutnick and Huang regarding national security concerns. |
Lutnick proactively agreed to appear voluntarily before the Senate Banking Committee, Commerce spokeswoman Kristen Eichamer told CNBC on Friday. Huang was asked to sit for a closed-door briefing on Dec. 1 before House committees.
