Scott Bessent says Treasury wanted to blacklist Megaspeed ‘for months,’ blaming Howard Lutnick as Nvidia fallout widens: ‘Commerce has the pen’

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Bessent said the Treasury, Defense, and State Departments were all in favor of placing trade restrictions on Megaspeed, but only Commerce had the power to do so.

Secretary of Commerce Howard Lutnick is now facing public pressure from his fellow Cabinet members over his decision to not blacklist Megaspeed, the cloud computing company at the center of Nvidia ex-CEO Jensen Huang’s affair with a suspected Chinese spy.

The Treasury Department, among other federal agencies, were in favor of placing trade restrictions on Megaspeed, but the decision ultimately lay with Lutnick, Treasury Secretary Scott Bessent told CNBC on Friday.

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

Megaspeed is under investigation by the Justice Department over the suspected violation of U.S. export controls, which prohibit certain U.S.-made chips from being sold and shipped to China. Helmed by Alice Huang, the alleged spy, Megaspeed and its Malaysian subsidiary Speedmatric shipped at least $7.5 billion in Nvidia chips to China over two years, The Information reported.

Lutnick is facing intensifying scrutiny over reports he took action to protect Nvidia from the Trump administration’s export controls of U.S. AI hardware to China. The commerce secretary reportedly spent months “undoing” efforts to hold Megaspeed accountable for potential export control violations, Axios reported. Bessent confronted Lutnick in the Situation Room following the midterm elections over not placing Megaspeed on the entity list, according to the outlet.

Bessent told CNBC, “We don’t repeat conversations in the Situation Room.”

According to the New York Times, when Trump officials approached Oracle about cancelling a $7 billion deal to lease chips to Chinese tech conglomerate Tencent, Lutnick’s top deputy Jeff Kessler spoke up and said Lutnick had issues with a cancellation, as it would halt the shipment of 100,000 advanced Nvidia AI chips. Lutnick reportedly said he didn’t understand the rush to scrap the deal.

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