Bessent Blames Commerce Department for Failure to Blacklist Megaspeed

On CNBC’s “Squawk Box” on Friday, U.S. Treasury Secretary Scott Bessent faulted the Commerce Department for leaving Singapore-based Megaspeed off the entity list.

“Treasury, War, USTR, and State were in favor of putting Megaspeed on the entity list for months, but Commerce has the pen,” Bessent said, using “War” for the Pentagon. “You will have to ask them about their internal processes.”

Commerce Holds the Decision

The remarks are a rare public rebuke of one cabinet department by another. Commerce Secretary Howard Lutnick oversees the Bureau of Industry and Security, which maintains the list.

“This is a BIS decision, and perhaps the FTC could put something on their restrictive list,” Bessent told CNBC, saying Treasury’s Office of Foreign Assets Control has no role in such export controls. He said he and his deputy had pressed the issue at the deputies’ level for months.

Axios reported that Commerce did not immediately respond.

Months of Pressure, Little Movement

Megaspeed, a cloud computing firm and Nvidia customer, is suspected of buying advanced chips for data centers in Southeast Asia and routing them to China. The company reportedly traded more than $4 billion worth of Nvidia chips over two years.

The comments follow an Axios account that Bessent confronted Lutnick in the White House Situation Room over the same failure, and that Lutnick replied he would “look into it.” A Commerce spokesperson later told Axios that conversation did not take place.

Senior White House officials have also discussed whether Lutnick should be forced out, even as a White House official said President Trump retains complete confidence in him.

Scrutiny Turns to Nvidia

Bessent said he was “frustrated” because Trump “made it very clear that China should not receive any Nvidia chips above H100s.”

“Any leakage is very frustrating because it hurts our great companies, and in the AI race gives the Chinese an advantage,” he said.

Nvidia chief executive Jensen Huang resigned on Thursday after reports of an affair with former Megaspeed executive Alice Huang, whom U.S. authorities have identified as a suspected Chinese intelligence asset. The two are not related. Beijing has denied the allegations.

“The story thus far has been on Jensen Huang’s personal foibles,” Bessent 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” to “what were obviously pass-through shell companies?”

Anyone at the company should “be held accountable for that,” he said. Asked whether Congress needed to intervene, he replied: “We have all the authorities that we need. They just need to be implemented.”

On Thursday, Bessent separately warned that Chinese AI models lack safety guardrails.