Bessent faults Commerce over Megaspeed as Nvidia chip scandal widens

US Treasury Secretary Scott Bessent has accused the Commerce Department of ignoring months of requests to blacklist Megaspeed, the company at the center of the Nvidia chip-export scandal. Commerce Secretary Howard Lutnick now faces a Senate summons and, according to insiders, internal White House debate over whether he should resign.

Bessent told CNBC that other government agencies had asked the Commerce Department "for months" to place Megaspeed on the blacklist. The department never acted, and it holds the lead responsibility for that list. Placement on the blacklist (a register of companies to which US goods may generally not be shipped) is the government's standard tool for cutting off suspect buyers.

How did the Nvidia chips reach China?

Megaspeed was founded by Alice Huang, whom US intelligence services suspect of being a Chinese spy. She allegedly had an affair with Nvidia chief Jensen Huang. China has rejected the espionage allegations. Huang resigned from all his Nvidia posts over the affair.

According to Bloomberg, Megaspeed illegally shipped high-performance Nvidia chips to China. The Trump administration had banned delivery of Nvidia's most powerful semiconductors to China, aiming to slow Chinese progress in artificial intelligence. Bloomberg reports that such chips are now in use in a datacenter in Shanghai, having reached the country through Megaspeed.

Bessent described himself as "frustrated" over the matter. Nvidia and Jensen Huang had consistently maintained that the company complies with all prohibitions. Huang had personally advocated for chip sales, arguing they would tie China to US technology rather than fuel the development of rival systems that could compete with Nvidia on the world market.

US authorities have repeatedly concluded, despite the export ban, that some firms buy Nvidia technology ostensibly for their own use and then forward it to China. The Megaspeed case fits that pattern, and it has landed on Lutnick's desk as the cabinet official responsible for enforcement.

What is Congress preparing?

The Chinese Foreign Ministry has warned the US government against imposing new semiconductor export restrictions in response to the scandal. A spokesperson said China "consistently opposes the abuse of control measures that disrupt the stability of global industrial and supply chains and are in no one's interest."

In the US Congress, a bipartisan majority is forming behind tighter export controls on advanced AI chips. House Speaker Mike Johnson said chip export controls are currently a major issue and that he favors restricting the People's Republic's access. Republicans aim to attach new AI-chip restrictions to the annual defense budget.

Senate Banking Committee Chair Tim Scott, a Republican, wants Lutnick and Jensen Huang to testify before the committee soon. "Recent reports give rise to serious concerns about our national security and the protection of sensitive US technology," Scott wrote on X.

The summons puts Lutnick in a difficult position. According to insiders, senior government officials are discussing in the White House whether to press the minister to resign. The timetable for that decision remains open, and no statement from the White House has addressed it.

Who succeeds Jensen Huang?

A new name has entered the question of who will succeed Jensen Huang as Nvidia chief. According to a press report, Nvidia's board has approached Rene Haas, chief of the British chip designer Arm.

The Financial Times, citing people familiar with the matter, reported that Haas is one of several candidates for the succession. There is no guarantee the position will be offered to him, or that he would accept it. The board's deliberations continue, and nothing in the report binds Nvidia to a timeline.

The scandal now spans three fronts: alleged illegal exports through Megaspeed, a cabinet-level dispute over enforcement failure, and a succession race at the world's most valuable chipmaker. Each front carries open questions. Neither Commerce nor Nvidia has publicly answered the core allegation that banned chips sit in a Shanghai datacenter today.