Bessent blames U.S. Commerce Dept. for failing to blacklist firm at heart of Nvidia scandal

Detailed summary

Scott Bessent says it was up to Commerce Department to blacklist Singapore firm tied to Jensen Huang

U.S. Treasury Secretary Scott Bessent said on Friday his department had favoured putting Singapore-based cloud computing firm Megaspeed on the U.S. entity list for months but that it was up to the Commerce Department to act, adding that the Federal Trade Commission could possibly take other action.

Treasury’s “OFAC (Office of Foreign Assets Control) has no control over things like this, in terms of exports. This is a BIS (Bureau of Industry and Security) decision, and perhaps the FTC could put something on their restrictive list,” Bessent told CNBC.

He added that the administration was working to shut down “leakage” in the chip export system and pointed to questions over how well Nvidia vetted its partner company amid CEO Jensen Huang’s exit this week, which sent shock waves across the AI industry.

Megaspeed has been in the spotlight following reports that Jensen Huang had an affair with former Megaspeed executive Alice Huang, whom U.S. authorities suspect of being a Chinese spy.

U.S. lawmakers have called for tougher restrictions on China’s access to advanced AI chips in the wake of the scandal, which has threatened to implicate some Trump administration members, including Commerce Secretary Howard Lutnick, amid growing questions over the administration’s oversight of chip sales to China.

“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 told CNBC’s Squawk Box program.

“It’s important that anyone at the company there be held accountable for that.”

Asked if Congress needed to step in to act on export controls, he said: “We have all the authorities that we need. They just need to be implemented.”

Opening of the article, excerpted from The Globe and Mail (Report on Business). To read the rest, open the article on the publisher's site.