Bessent Blames Lutnick for Megaspeed Blacklist Delay as Huang Resigns

Key points

• Bessent told CNBC that Treasury and other agencies favored blacklisting Megaspeed for months, but Commerce has the 'pen' to act and failed to do so.
• Jensen Huang resigned as Nvidia CEO on Thursday after admitting to an affair with Alice Huang, a Megaspeed executive linked to Chinese intelligence.
• Bessent expressed frustration that chip leakage gives China an advantage in the AI race, contradicting Trump's directive to block advanced chip exports.
• CNN reports that some Trump advisers are discussing whether to dismiss Lutnick, though the White House has publicly maintained confidence in him.
• Lawmakers from both parties are demanding Lutnick testify before Congress and preserve documents related to the Megaspeed investigation.

Background

This dispute follows earlier reports that a Commerce Department investigation into Megaspeed was transferred to the Justice Department after Nvidia's general counsel intervened. The case gained public attention after intelligence officials warned that Huang had a relationship with a suspected spy. Previous coverage noted that Trump had defended Lutnick, calling him a transformative secretary, even as Republicans lost control of Congress in recent midterms.

How outlets are covering it

The Financial Times and CNBC highlight Bessent's direct attribution of blame to Commerce, emphasizing the bureaucratic failure to implement existing authorities. CNN adds the dimension of potential political consequences, noting that some advisers are discussing Lutnick's ouster despite White House support. The New York Times frames the issue as a long-standing conflict, suggesting Lutnick has taken a softer line on Nvidia controls compared to other officials who favor stricter restrictions. All sources agree that the failure to blacklist Megaspeed has become a central point of contention in the administration's handling of AI export controls.

Why it matters

The failure to blacklist Megaspeed raises questions about the effectiveness of US export controls in preventing advanced technology from reaching China. It also highlights internal divisions within the Trump administration over balancing trade interests with national security concerns. The potential dismissal of Lutnick could signal a shift in policy direction, while congressional demands for testimony may lead to broader investigations into the handling of the case.

What to watch

Watch for Lutnick's response to Bessent's accusations and potential congressional testimony. Monitor whether the White House moves to dismiss Lutnick or maintains its current stance. Track any updates from the Justice Department regarding the Megaspeed investigation and whether Nvidia faces further accountability for its client vetting processes.