Bessent blames Lutnick’s Commerce Department for not restricting Nvidia chips to China

WASHINGTON — Treasury Secretary Scott Bessent said Friday he was frustrated with the Commerce Department’s delay in implementing restrictions over the export of certain Nvidia chips to China.

Bessent said on CNBC that his department, along with the departments of State and Defense and the U.S. Trade Representative, were in favor of adding Megaspeed to an export control list for months but that the Commerce Department was in charge of the matter.

“I am frustrated when President Trump made it very clear China should not receive any Nvidia chips above H100s,” he said, referring to an older generation of the company’s advanced AI chips. Commerce “has the pen, and you will have to ask them about their internal processes.”

Bessent’s comments were an unusually public rebuke of the Commerce Department, which oversees U.S. government controls over exports of sensitive, high-tech goods. The comments come as Nvidia’s ties to Singapore-based Megaspeed International, which prominently touts the companies’ partnership on its website, play a prominent role in the resignation of Nvidia CEO Jensen Huang. Huang allegedly had an affair with the CEO of Megaspeed, Alice Huang, who U.S. intelligence suspects is a Chinese spy, the New York Times has reported. China has denied allegations of spying.

Commerce Secretary Howard Lutnick has come under increasing scrutiny because of his reportedly close relationship with Huang. The Times reported 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 purchased more than $4 billion worth of Nvidia’s advanced semiconductors.

The split in President Donald 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 artificial intelligence, powering AI models such as those developed by Open AI and Anthropic.

The U.S. 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 U.S. technology companies’ lead. Yet China has at times retaliated, creating controversy over how far the U.S. should push its restrictions.

The Commerce Department did not immediately respond to messages seeking comment.

Bessent declined to comment Friday on the Times report that he confronted Lutnick last week in the White House’s situation room.

Separately, Axios reported this week that Lutnick received a classified memo this spring warning about Jensen Huang’s relationship with a suspected spy.

Numerous members of Congress have said they will investigate Lutnick’s actions and called for him to testify on Capitol Hill.

On Thursday, Oregan Sen. Ron Wyden and Massachusetts Rep. Richard Neal, both Democrats, wrote Lutnick a letter demanding that he preserve all records related to decisions about Nvidia chip exports, pending an investigation. Wyden and Neal are the top Democrats on the Senate Finance and House Ways and Means committees, respectively.

Trump’s approval of advanced Nvidia chip exports to China “raises critical questions about whether and to what extent political considerations are improperly influencing policy decisions made by the Administration,” Wyden and Neal wrote.

Republican Sen. John Kennedy of Louisiana, a member of the Senate Banking Committee, said he has questions for the commerce secretary and urged him to hold a press conference to explain what he knew.

“The Commerce Department greenlit $4 billion of sales of advanced chips to the company of the spy that Mr. Huang was having an affair with and I want to know why,” Kennedy said. “I want to know why the Commerce Department did it in light of the export controls, and everything I read indicates that this was a decision by the secretary himself.”

Kennedy added that Lutnick should testify before the Senate and should be subpoenaed if necessary.

Huang resigned Thursday after news that he had an affair with former Megaspeed executive Alice Huang, who U.S. intelligence suspects to be a Chinese spy, according to The Times.

Last year, Megaspeed was accused of illicitly shipping advanced Nvidia computer chips into China, but in December said there was “no evidence” of such exports. On Thursday, Megaspeed maintained it takes its obligation to comply with American export control laws “extremely seriously” — and that it was committed to working “constructively and transparently” with the U.S. government.