Treasury Secretary Bessent publicly blames Commerce for failing to blacklist Megaspeed

Key points

• Treasury Secretary Scott Bessent stated on CNBC that the Commerce Department is responsible for failing to add Megaspeed to the entity list, despite months of support from the Treasury, State, and Defense Departments.
• Bessent expressed frustration that President Trump had directed restrictions on Nvidia chip exports to China, but Commerce delayed action, saying 'Commerce has the pen.'
• Commerce Secretary Howard Lutnick has agreed to testify before the Senate Banking Committee on December 10, amid bipartisan pressure to explain his department’s oversight of chip sales.
• Nvidia CEO Jensen Huang resigned on Thursday after reports of an affair with Alice Huang, a Megaspeed executive whom U.S. intelligence suspects is a Chinese spy.
• Megaspeed, a Singaporean data center firm, has purchased over $4 billion in advanced Nvidia semiconductors and was suspected of diverting chips to China, though the company denies wrongdoing.

Background

This dispute follows earlier reports that a Commerce Department investigation into Megaspeed was transferred to the Justice Department in late 2025 after Nvidia’s general counsel contacted Commerce officials. The controversy also follows the resignation of Nvidia CEO Jensen Huang, who had an affair with Alice Huang, a Megaspeed executive suspected of being a Chinese spy. Lutnick previously faced scrutiny over his ties to Jeffrey Epstein and has been a close ally of President Trump, who has maintained confidence in him despite the scandal.

How outlets are covering it

The New York Times and The Washington Post emphasize the internal cabinet rift, with Bessent publicly attacking Lutnick’s department for the first time. The Washington Post notes that Lutnick resisted restrictions, arguing that keeping China dependent on U.S. technology was a strategic advantage. Yahoo Finance highlights the bipartisan pressure on Lutnick, with both Democrats and Republicans demanding answers, and notes that some Trump aides are discussing his potential dismissal. The Anchorage Daily News focuses on Bessent’s frustration with the delay and the broader fallout from the scandal, including calls for Lutnick to testify or be subpoenaed. All sources agree that the Commerce Department holds the authority to restrict exports, but they differ in emphasis: The New York Times and Washington Post focus on the internal conflict, while Yahoo Finance and the Anchorage Daily News highlight the political and congressional consequences.

Why it matters

The dispute highlights deep divisions within the Trump administration over the balance between national security and economic interests in the AI chip trade. It raises questions about the effectiveness of U.S. export controls and the potential for political interference in national security decisions. The outcome could influence future legislation on semiconductor exports and the relationship between the U.S. and China in the AI sector.

What to watch

Lutnick is scheduled to testify before the Senate Banking Committee on December 10. Congress may pass new curbs on semiconductor exports to China as part of a military funding bill before the end of the year. The Justice Department is expected to continue its investigation into Megaspeed, and the White House may decide whether to retain or replace Lutnick.