Political fallout widens in Nvidia spy scandal
WASHINGTON—Treasury Secretary Scott Bessent said on Friday he was frustrated with the commerce department’s delay in placing restrictions on Nvidia chip exports to a company led by an alleged Chinese spy.
Bessent said on CNBC that his department, along with the departments of state and defense and the US Trade Representative, were in favor of adding Singapore-based Megaspeed International to an export control list for months but that the commerce department was in charge of the matter.
“Commerce has the pen, and you will have to ask them about their internal processes,” Bessent said. “My deputy has been pushing this for months.”
Bessent’s comments were an unusually public rebuke of a fellow Cabinet member, in this case Commerce Secretary Howard Lutnick.
Cabinet split
Commerce oversees US government controls over exports of sensitive, high-tech goods. The comments come as Nvidia’s ties to Megaspeed are prominent in the resignation of Nvidia CEO Jensen Huang.
Huang allegedly had an affair with the CEO of Megaspeed, Alice Huang, who US intelligence suspects is a Chinese spy, The New York Times has reported. China has denied allegations of spying.
Lutnick has come under increasing scrutiny because of his reportedly close relationship with Huang. He has agreed to testify before the Senate amid questions over his department’s handling of export controls.
The ex-Nvidia CEO is also close to President Donald Trump and recently visited the White House Sept. 29 to discuss artificial intelligence (AI) safety. The Times reported on Thursday that Lutnick resisted placing greater limits on the sale of Nvidia’s more advanced chips to China. Chinese firms have accessed Nvidia’s chips through companies like Megaspeed, which has reportedly purchased more than $4 billion worth of Nvidia’s advanced semiconductors.
Restrictions
The split in Trump’s Cabinet reflects the widespread fallout from the scandal that has engulfed Nvidia, one of the most valuable publicly traded companies in the world. Nvidia’s computer chips play a central role in the buildout of AI, powering AI models such as those developed by OpenAI and Anthropic.
Just last month, Trump awarded the then Nvidia CEO a National Medal of Science. Earlier this week, Trump defended Huang, noting that “he said he had absolutely no idea that the person in question was a spy.”
The US government has, since the Biden administration, sought to restrict the sale of the most advanced AI computer chips to China in an effort to protect US technology companies’ lead. Yet China has at times retaliated, creating controversy over how far the United States should push its restrictions.
