Nvidia row: Scott Bessent confronts Howard Lutnick on inaction over Megaspeed diverting chips to China

Treasury Secretary Scott Bessent reportedly confronted Commerce Secretary Howard Lutnick over the Commerce Department's failure to blacklist Nvidia customer Megaspeed, a company accused of illegally diverting advanced US chips to China, amid mounting scrutiny over the administration's handling of intelligence concerns involving Nvidia chief executive Jensen Huang.

According to a report in Axios, at a White House Situation Room meeting, following the US midterm elections, Bessent questioned Lutnick on why Megaspeed had not been placed on the Commerce Department's Entity List, which identifies companies posing national security concerns. Lutnick initially struggled to respond before saying he would "look into it", according to the report that cited sources.

Commerce Undersecretary Jeff Kessler had also been repeatedly warned about Megaspeed during deputy-level meetings but deferred the decision to Lutnick, saying it was for the secretary to decide.

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Sources told Axios that Lutnick had spent the past year undoing efforts by other administration officials to hold Megaspeed accountable, partly out of concern that blacklisting the company could escalate trade tensions with China. The Commerce Department, however, denied that the confrontation between Bessent and Lutnick took place.

The dispute comes amid growing questions over what President Donald Trump knew about intelligence concerns surrounding Huang before his May trip to China.

Trump told The New York Times he had not been informed about the concerns before the trip. However, a US official and people familiar with the matter told the newspaper that Secretary of State Marco Rubio briefed Trump aboard Air Force One after learning Huang would join the presidential delegation. Trump reportedly proceeded with the plan despite the warning.

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Rubio had overseen a confidential intelligence memo circulated to senior administration officials ahead of the visit. It reportedly contained assessments that Alice Huang, a Chinese national associated with Singapore-based Megaspeed, had been recruited by China's Ministry of State Security and had a close relationship with Jensen Huang.

Nvidia's board has since announced an independent investigation into the matter, to be overseen by independent directors and outside counsel. Huang has pledged to cooperate.

The controversy has also exposed growing frustration among national security officials over the Commerce Department's export-control enforcement. The department has not added a single company to its Entity List in more than a year, despite pressure from other agencies.

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