Scott Bessent criticises Commerce Department over Nvidia chip exports to Megaspeed

US Treasury Secretary Scott Bessent has publicly criticised the Commerce Department, headed by Howard Lutnick, over its failure to restrict exports of sophisticated Nvidia semiconductors following a widening national security controversy.

The dispute stems from revelations surrounding former Nvidia chief executive Jensen Huang, who stepped down after reports emerged of a relationship with an ex-executive from cloud firm Megaspeed who was suspected of spying for China. Megaspeed, which acquired cutting-edge microchips from Nvidia, had faced investigations by federal authorities over allegations that it smuggled hardware into China. However, the firm was never placed on the federal entity list that bans American businesses from doing trade.

Speaking on CNBC, Bessent said multiple federal agencies had supported placing Megaspeed on the export restriction register for months. He noted that the Commerce Department holds sole authority over the paperwork and suggested observers inquire directly with the agency regarding its internal procedures. Bessent expressed frustration over delays in blacklisting the company, pointing to directives from President Donald Trump barring China from acquiring Nvidia chips superior to the H100 model.

Scrutiny is now intensifying across Capitol Hill, where lawmakers from both major political parties are demanding answers from Lutnick. The Senate Banking Committee has called the Commerce Secretary to testify in December regarding his department's oversight of Nvidia's shipments. Congressional leaders, including committee chair Tim Scott, cited grave risks to national security and the safeguarding of advanced American technology. Huang has likewise been summoned to appear before the panel.

Other lawmakers have initiated separate inquiries into how exports were handled. Key Democrats, including Representative Richard E. Neal of the House Ways and Means Committee and Senator Ron Wyden of the Senate Finance Committee, have ordered Lutnick and his agency to retain all correspondence and records involving Nvidia and Huang.

According to Neal and Wyden, Nvidia was permitted to provide advanced H200 chips to Chinese entities if the components were routed from Taiwanese manufacturing sites into the United States for review. The products were subjected to a 25 percent import tariff under federal trade statutes designed to address national security concerns, an arrangement the lawmakers argued compromised rather than protected strategic interests.

Beyond governmental oversight, Bessent also questioned Nvidia's corporate compliance. He urged investigators to look past Huang's personal conduct and determine whether the semiconductor manufacturer adequately vetted its buyers or knowingly supplied intermediary shell businesses, adding that individuals at the firm should face accountability if rules were broken.