Bessent Points Finger at Commerce Department Over Nvidia Chip Exports to China-Linked Firm

US Treasury Secretary Scott Bessent has blamed the Commerce Department, led by Howard Lutnick, for failing to properly oversee exports of high-specification Nvidia chips, as the fallout from the scandal surrounding the chipmaker continues to spread.

Pressure is building on Lutnick from across the political spectrum to explain his department's handling of the matter. Nvidia chief executive Jensen Huang was forced out after revelations that he had an affair with a businesswoman who was also allegedly a Chinese spy. Megaspeed, the company she worked for, had reportedly been investigated by US government agencies on suspicion of smuggling Nvidia chips into China, yet it has never been placed on the list of firms that American companies are barred from doing business with.

Speaking to CNBC, Bessent said several agencies "were in favour of putting Megaspeed on the entity list for months." He added: "But Commerce has the pen.. and you will have to ask them about their internal process."

Bessent said he was "frustrated" by the delays in adding the company to the export control list and by reports that advanced AI chips had leaked into China. "President Trump made it very clear that China should not receive any Nvidia chips above H100s, so any leakage is very frustrating because it hurts our great companies in the AI race, because it gives the Chinese an advantage," he said.

The Treasury chief also directed criticism at Nvidia itself. "The story has been thus far of Jensen Huang's personal foibles," he told CNBC's Squawk Box. "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? It's important that anyone at the company there be held accountable for that."

The Commerce Department investigated Megaspeed last year over suspicions it had smuggled some of Nvidia's most advanced AI chips into China, according to the New York Times, while the Financial Times reported the department had been delaying efforts to place the cloud computing firm on the blacklist despite pressure to do so. Megaspeed has been contacted for comment.

Lutnick has been summoned to testify before the Senate Banking Committee in December over his department's role in allowing Nvidia to export the chips, and Huang has also been called to appear before the panel over his affair with the former Megaspeed executive. "Recent reports raise serious concerns about our national security and the protection of sensitive US technology," committee chairman, Republican Senator Tim Scott, posted on X. Other congressional committees have asked Lutnick and his department to preserve all records relating to Nvidia and Huang.

Democrats on key committees have demanded the Commerce Department retain records on decisions permitting Nvidia to sell advanced AI chips to Chinese companies, including all communications with or about Nvidia and Huang. Ways and Means Committee Ranking Member Richard E. Neal and Senate Finance Committee Ranking Member Ron Wyden are opening their own investigations, noting that Nvidia's H200 chips could be sold to Chinese firms if first imported from their Taiwan manufacturing facility into the United States for inspection, with a 25% tariff paid to the federal government under a section of the Trade Act they say is meant to let the president act against imports that threaten national security. "Trump's use of the statute appears to have done the opposite, undermining US national security and putting Americans at risk," they said.