Nvidia fallout deepens as Trump official blames commerce secretary for lack of controls

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Senior White House officials are said to be discussing whether Howard Lutnick should be pushed out amid the scandal

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The fallout from the Nvidia spy affair scandal has deepened as Trump’s treasury secretary pointed the finger at another Cabinet member for failing to blacklist the Singapore company at the heart of the controversy.

Treasury Secretary Scott Bessent said the Treasury, Pentagon, State Department and U.S. Trade Representative's Office had favored adding Megaspeed to the Commerce Department’s trade black list for months.

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

The Commerce Department's so-called entity list is a trade blacklist of groups connected to China that US officials say pose national security risks. The department did not immediately return a request for comment.

Lutnick's role in overseeing export controls on US chips to China has drawn growing criticism. Reports emerged this week that Lutnick reportedly stalled President Donald Trump's crackdown on companies suspected of diverting Nvidia's ‌chips to China.

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.

Reuters reported Thursday that senior White House officials are discussing whether Lutnick should be pushed out amid a spy scandal surrounding Nvidia's now-former CEO Jensen Huang.

Bessent added that the administration was working to shut down "leakage" in the chip export system. He 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.

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