US Treasury Secretary Scott Bessent has criticized the Commerce Department for failing to blacklist Singapore-based firm Megaspeed, the company at the center of an escalating scandal involving Nvidia's former chief executive Jensen Huang. Speaking during an interview on CNBC, Bessent disclosed that the Treasury, the Defence Department, the US Trade Representative's office, and the State Department had all supported placing Megaspeed on Washington's trade blacklist "for months."
Highlighting jurisdictional boundaries within the US government, Bessent pointed out that export enforcement ultimately rests with Commerce. "But Commerce has the pen," Bessent said, suggesting that questions about internal delays should be directed to that department. He clarified that Treasury's Office of Foreign Assets Control (OFAC) does not oversee export decisions, which fall under the Bureau of Industry and Security (BIS) within Commerce. However, he raised the possibility that the Federal Trade Commission (FTC)—an independent agency tasked with consumer protection and fair competition—could potentially act by placing entities on its restrictive list.
The scrutiny surrounding Megaspeed follows reports that Jensen Huang engaged in an affair with former Megaspeed executive Alice Huang, whom American authorities suspect of acting as a Chinese spy. Huang's departure from Nvidia this week shocked the artificial intelligence sector and sparked urgent calls from US lawmakers for tighter restrictions on China's access to advanced AI semiconductors. The controversy has also drawn attention to the Trump administration's regulatory oversight of chip exports, particularly regarding Commerce Secretary Howard Lutnick.
Bessent underscored the necessity of stemming "leakage" in the semiconductor export network and questioned whether Nvidia exercised proper due diligence when vetting its partner firm. "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 and that they were selling to what were obviously pass-through shell companies?" Bessent questioned, adding that individuals at Nvidia must be held accountable. When asked if congressional intervention is required to strengthen export enforcement, Bessent insisted that existing powers are sufficient, stating, "We have all the authorities that we need. They just need to be implemented."
