US Treasury Secretary Scott Bessent has accused the Commerce Department of delaying efforts to place Singapore-based technology firm Megaspeed on Washington's trade blacklist over allegations that it helped Chinese companies circumvent American export restrictions on Nvidia chips.
Bessent said several US government agencies, including the Treasury, Defence Department, Office of the US Trade Representative and State Department, had supported the proposed blacklisting of the company for months, but the Commerce Department had yet to act.
Speaking during an interview with CNBC on Friday, he said the other agencies had backed the move but that the final decision rested with the Commerce Department.
“But Commerce has the pen,” Bessent said. “You will have to ask them about their internal processes.”
He expressed frustration over the alleged diversion of Nvidia chips to China, saying President Donald Trump had made it clear that Beijing should not have access to Nvidia processors more advanced than the H100 model.
“Any leakage is very frustrating because it hurts our great companies, and in the AI race gives the Chinese an advantage,” he said.
The comments amounted to an unusual public criticism of one cabinet department by another, with the Commerce Department headed by Secretary Howard Lutnick.
Megaspeed is suspected of helping Chinese businesses bypass US export controls by purchasing Nvidia processors for data centres in Southeast Asia before allegedly redirecting them to China.
Reports indicate that the Singapore-based company handled more than $4 billion worth of Nvidia chips over a two-year period.
The company has also come under scrutiny following reports that its former director, Alice Huang, was allegedly linked to Chinese intelligence and had a personal relationship with Nvidia Chief Executive Officer, Jensen Huang. The two are not related.
Beijing has rejected the allegations of espionage.
Jensen Huang reportedly acknowledged having an extramarital affair in a letter to Nvidia employees dated November 8, although he did not identify the woman involved. He subsequently resigned from his position on Thursday.
Following his resignation, Nvidia's board announced plans to investigate the matter, while three committee chairmen of the US Congress requested that he appear for a closed-door briefing scheduled for November 18.
Bessent, however, criticised the attention given to Huang's private life, arguing that the more pressing issue was whether Nvidia properly scrutinised its customers and took adequate measures to prevent its products from reaching unauthorised destinations.
“The story thus far has been on Jensen Huang’s personal foibles,” he said.
“The real story here should be: Did Nvidia know their client, and was there a robust effort at Nvidia to make sure that there was no leakage.”
He also raised concerns about whether Nvidia had supplied its products to companies that were effectively serving as intermediaries for the transfer of restricted technology to China.
“I think it’s important that anyone at the company there be held accountable for that,” Bessent added.
The Treasury secretary further acknowledged that weaknesses remained in the enforcement of US export restrictions, saying the administration was working continuously to address the problem.
He described the situation as evidence of significant loopholes in the system through which restricted technology could reach prohibited destinations.
US Treasury chief blames Commerce Department for Nvidia scandal