Treasury Wanted Megaspeed Blacklisted for Months: Bessent Puts Pen in Commerce's Hand

At least $7.5 billion in Nvidia chips shipped to China over two years, and Treasury wanted the company behind those shipments blacklisted "for months" — but the Commerce Department held the pen. Treasury Secretary Scott Bessent disclosed that rift on Friday in an interview with CNBC, widening the fallout around Nvidia, its former CEO Jensen Huang, and the cloud computing firm Megaspeed.

"There was coordination. Treasury, War, USTR, and State were in favor of putting Megaspeed on the entity list for months," Bessent said. "But Commerce has the pen… You will have to ask them about their internal processes."

The statement puts public pressure on Commerce Secretary Howard Lutnick from a fellow Cabinet member. It also confirms what Axios first reported: that Bessent confronted Lutnick in the Situation Room after the midterm elections over the blacklisting decision. Asked about that confrontation, Bessent declined to elaborate. "We don't repeat conversations in the Situation Room," he told CNBC.

What is Megaspeed accused of?

The Justice Department is investigating Megaspeed for suspected violations of U.S. export controls, which prohibit certain American-made chips from being sold and shipped to China. The company is helmed by Alice Huang, the woman identified as a suspected Chinese spy whose yearslong ties to Jensen Huang enabled the chip sales, according to The Information's reporting. Megaspeed and its Malaysian subsidiary Speedmatric moved at least $7.5 billion in Nvidia chips to China over two years, the outlet reported.

The scale is not in dispute. The question, increasingly, is who allowed it to continue.

Why is Lutnick under pressure?

Lutnick reportedly spent months "undoing" efforts to hold Megaspeed accountable for potential export control violations, according to Axios. The scrutiny has intensified since news of Huang's affair broke.

The New York Times added a second front to the story. When Trump administration officials approached Oracle about cancelling a $7 billion deal to lease chips to Chinese tech conglomerate Tencent, Lutnick's top deputy Jeff Kessler intervened. Kessler said Lutnick had issues with a cancellation, because it would halt the shipment of 100,000 advanced Nvidia AI chips. Lutnick reportedly said he did not understand the rush to scrap the deal.

Lawmakers in both parties now want Lutnick held to account for keeping Megaspeed off the blacklist.

"The obvious question is why did he choose to sell advanced chips?" Republican Louisiana Sen. John Kennedy told Politico. "Secretary Lutnick needs to answer that in front of God and country."

Lutnick has agreed to testify alongside Huang before the Senate Banking Committee on Dec. 10, to address national security concerns.

The Commerce Department and Nvidia did not immediately respond to a request for comment.

Could Lutnick lose his job?

Senior White House officials are weighing whether to remove the commerce secretary from his post, Reuters reported. This is not the first flashpoint. Even before news of Huang's affair broke, Lutnick had drawn criticism for declining to add 100 companies — including China's DeepSeek — to the entity list.

Inside the administration, Lutnick argued with senior White House officials that export regulations against China would stoke the trade war, the Times reported. He insisted on raising China's restricted access to U.S. chips directly with President Donald Trump.

What conflicts of interest have surfaced?

Lutnick's relationship with Nvidia has fueled concerns about favoritism toward the chipmaker.

"Howard is the person I talk to most in the administration — he's on top of the technology and learning the industry quickly," Jensen Huang said in September 2025.

The financial overlap predates the Cabinet post. Before becoming commerce secretary, Lutnick was CEO and chairman of investment bank Cantor Fitzgerald, which held roughly $1.2 billion in Nvidia stock before Trump's second term began, according to SEC filings.

The Dec. 10 Senate hearing will put both men — the regulator and the chipmaker's former chief — under the same lights. Until then, the entity list remains unwritten where Commerce holds the pen, and $7.5 billion in chips already sit on the other side of the controls meant to stop them.