Bessent blames Lutnick's Commerce Department for not restricting Nvidia chips to China

Washington: Treasury Secretary Scott Bessent said Friday he was frustrated with the Commerce Department's delay in implementing restrictions over the export of certain Nvidia chips to China.

Bessent said on CNBC that his department, along with the departments of State and Defence and the US Trade Representative, were in favour of adding Megaspeed to an export control list for months but that the Commerce Department was in charge of the matter.

"I am frustrated when President Trump made it very clear China should not receive any Nvidia chips above H100s," he said. Commerce "has the pen, and you will have to ask them about their internal processes."


Bessent's comments were an unusually public rebuke of the Commerce Department, which oversees US government controls over exports of sensitive, high-tech goods. The comments come as Nvidia's ties to Singapore-based Megaspeed International, which prominently touts the companies' partnership on its website, play a prominent role in the resignation of Nvidia CEO Jensen Huang. Huang allegedly had an affair with the CEO of Megaspeed, Alice Huang, who US intelligence suspects is a Chinese spy. China has denied allegations of spying.

Commerce Secretary Howard Lutnick has come under increasing scrutiny because of his reportedly close relationship with Huang. The New York Times reported Thursday that Lutnick resisted placing greater limits on the sale of Nvidia's more advanced chips to China. Chinese firms have accessed Nvidia's chips through companies like Megaspeed, which has purchased more than USD 4 billion worth of Nvidia's advanced semiconductors.

The split in President Donald Trump's cabinet reflects the widespread fallout from the scandal that has engulfed Nvidia, one of the most valuable publicly-traded companies in the world. Nvidia's computer chips play a central role in the buildout of artificial intelligence, powering AI models such as those developed by Open AI and Anthropic.

The US government has, since the Biden administration, sought to restrict the sale of the most advanced AI computer chips to China in an effort to protect US technology companies' lead. Yet China has at times retaliated, creating controversy over how far the US should push its restrictions.

The Commerce Department did not immediately respond to messages seeking comment.

Bessent declined to comment Friday on the Times report that he confronted Lutnick last week in the White House's situation room.

Members of Congress have called for Lutnick to explain his decision-making and testify on Capitol Hill.

Republican Sen. John Kennedy of Louisiana, a member of the Senate Banking Committee, said he has questions for the commerce secretary and urged him to hold a press conference to explain what he knew.

"The Commerce Department greenlit USD 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. "I want to know why the Commerce Department did it in light of the export controls, and everything I read indicates that this was a decision by the secretary himself."

Kennedy added that Lutnick should testify before the Senate and should be subpoenaed if necessary.

Huang resigned Thursday after news that he had an affair with former Megaspeed executive Alice Huang, who US intelligence suspects to be a Chinese spy, according to The Times.

Last year, Megaspeed was accused of illicitly shipping advanced Nvidia computer chips into China, but in December said there was "no evidence" of such exports. On Thursday, Megaspeed maintained 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 US government.