Nvidia spy scandal deepens as US Treasury chief faults government over firm's chip exports

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Singapore-based Megaspeed emerges at centre of a growing scandal involving Nvidia chief Jensen Huang, amid a US Commerce Department investigation into whether the company violated American chip export restrictions.

US Treasury Secretary Scott Bessent has pointed at the Commerce Department for failing to blacklist Megaspeed, the Singapore company at the centre of a scandal involving Nvidia chief executive Jensen Huang.

Speaking on CNBC, Bessent said Treasury, the Defence Department, the US Trade Representative's office and the State Department had backed adding Megaspeed to Washington's trade blacklist, "for months."

"But Commerce has the pen," Bessent said. "You will have to ask them about their internal processes."

Bessent added that the Federal Trade Commission (FTC), an independent US government agency responsible for protecting consumers and promoting fair competition, 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 said.

He noted 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 shockwaves 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 US authorities suspect of being a Chinese spy.

US lawmakers have called for tighter controls on China's access to advanced AI chips following the scandal, which has also raised questions about the Trump administration's oversight of chip sales to China, including the role of Commerce Secretary Howard Lutnick.

"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.

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