Bessent Blames Lutnick for Failing to Stop Nvidia Chips Reaching China
Treasury Secretary Scott Bessent blamed Commerce Secretary Howard Lutnick's department for failing to block Megaspeed from buying advanced Nvidia chips, a rare public split inside the Trump cabinet. Lutnick is due before the Senate Banking Committee in December.
US Treasury Secretary Scott Bessent accused Commerce Secretary Howard Lutnick of failing to prevent China from obtaining Nvidia's most advanced chips, in a CNBC interview on Friday, November 13, 2026. The rare public clash between two of President Donald Trump's top advisers follows the ouster of Jensen Huang as Nvidia CEO.
Bessent said several agencies wanted Singapore-based Megaspeed added to the government's entity list, which bars US companies from working with named firms. "Treasury, War, USTR, and State, they were in favor of putting Megaspeed on the entity list for months," he said. "But Commerce has the pen."
Frustration over leaks
Bessent said he was frustrated by reports of advanced chips leaking into China. He said Trump had made clear that China should not receive any Nvidia chips above H100s, and that any leakage hurts American companies in the AI race and hands the Chinese an advantage.
On the delay in listing Megaspeed, he said people would "have to ask them about their internal process."
Nvidia also in the frame
Bessent did not spare Nvidia. He said the story so far had been about Huang's personal foibles. "The real story here should be: did Nvidia know their client," he said, adding that the company should have made sure it was not selling to what were obviously pass-through shell companies.
Huang was ousted after revelations that he had an affair with a businesswoman who worked for Megaspeed and is alleged to be a Chinese spy. Megaspeed had reportedly been probed by US agencies over suspicions it smuggled Nvidia chips into China, yet it was not on the entity list. Megaspeed has been contacted for comment.
What Commerce did and did not enforce
Chris McGuire, a senior fellow at the Council on Foreign Relations and a former technology director on President Joe Biden's National Security Council staff, said the Biden team pushed through rules in early 2025 requiring most foreign companies to get Commerce permission to buy advanced chips. The rules were due to take effect in May 2025.
"Two days before it went into effect, the Commerce Department said they're not enforcing it," McGuire said. Had Commerce enforced it, he said, Megaspeed could not have bought chips without US government approval.
The Financial Times separately reported that Commerce was delaying efforts to add the cloud computing firm to the list. The New York Times reported that Commerce had been investigating Megaspeed over suspected smuggling last year.
Congress steps in
Lutnick has been summoned to appear before the Senate Banking Committee in December. Huang has also been summoned to testify about his alleged affair with the former Megaspeed executive.
"Recent reports raise serious concerns about our national security and the protection of sensitive US technology," committee chairman Republican Senator Tim Scott posted on X.
Democrats Richard E Neal, ranking member of the Ways and Means Committee, and Ron Wyden, ranking member of the Senate Finance Committee, are starting investigations into how Nvidia was allowed to sell the chips. Democrats on key committees have asked Commerce and Lutnick to retain all records on those decisions, including communications with or about Nvidia and Huang.
Tensions between Bessent and Lutnick have reportedly simmered before. US media have reported that they jostled over the treasury role in 2024 and clashed over tariff policy last year.
