US Treasury chief blames Commerce Dept for failure in Nvidia scandal

US Treasury Secretary Scott Bessent blamed the Commerce Department for failing to blacklist Megaspeed, the Singapore company at the center of a scandal that led Nvidia CEO Jensen Huang to resign. Bessent spoke on CNBC, stating that while multiple government agencies had backed adding Megaspeed to Washington's trade blacklist for months, it was up to Commerce to implement the policy.

Bessent expressed frustration, as President Donald Trump had made it clear that China should not receive any Nvidia chips above H100s. He emphasized that any leakage of such technology was frustrating, as it hurt US companies and gave China an advantage in the AI race. The allegations against Megaspeed involve aiding Chinese firms in circumventing US export controls by purchasing Nvidia chips for data centers in Southeast Asia and routing them to China.

Megaspeed reportedly traded over $4 billion worth of Nvidia chips over two years. The company's former director, Alice Huang, has been identified as a possible Chinese intelligence asset with ties to Nvidia CEO Jensen Huang. Beijing has denied the spying allegations. Huang acknowledged an extramarital affair in a letter to Nvidia employees and resigned on Thursday.

Bessent criticized media coverage for focusing on Huang's personal life instead of addressing the broader issues of Nvidia's knowledge of its clients and efforts to prevent technology leakage. He questioned whether Nvidia had been selling to pass-through shell companies and called for accountability within the company. Bessent also noted that the administration is working to close down the leakage issue.