Nvidia scandal: Bessent accuses Commerce chief Lutnick of stalling Megaspeed blacklisting

Bessent accuses Lutnick of holding up the Megaspeed listing

On Friday, 13 November, US Treasury Secretary Scott Bessent told CNBC that Commerce Secretary Howard Lutnick had not stopped Nvidia chip exports to Megaspeed, a Singapore-based company. Several agencies, including the State Department and the War Department, had pushed for months to place the firm on the Commerce Department's Entity List, which would have restricted its access to US technology. Bessent said the final decision sat with Commerce.

“they were in favor of putting Megaspeed on the Entity List for months, but Commerce has the pen.”

Huang's exit and his ties to Lutnick

Jensen Huang stepped down as Nvidia's chief executive on Thursday, 12 November, after reports of several affairs, including one with a woman US authorities allege is a Chinese spy. That woman runs Megaspeed, which US authorities say helped smuggle Nvidia chips into China. Huang has said that Lutnick described him in grand terms at their first meeting and told him to call whenever he needed access to Trump and the administration. Lutnick speaks with Trump several times a day by his own account, and reports say he spends more time at the White House than at his department.

What Axios reported on the Commerce file

Axios reported that Lutnick slowed broader administration efforts over the past year to address suspicions that Megaspeed was diverting chips to China. Trump backed restrictive measures three times, in May, in August and on 5 November, according to the same reporting, but Lutnick and export control chief Jeffrey Kessler opposed putting them into effect, warning of a new trade conflict with China. Sources told Axios that a CIA warning about the Huang affair appears to have been ignored by Commerce officials. In March, Marco Rubio, who is secretary of state and also national security adviser, compiled a memo to make sure Cabinet officials with stakes in Nvidia and AI were informed.

Commerce's response and political fallout

In response to Axios's questions, the Commerce Department rejected the reporting as inaccurate.

“Secretary Lutnick plays a fundamental role in advising the President across many different industries.”

Republican senators have openly criticized Lutnick, and MAGA commentators have attacked him on Steve Bannon's War Room show. The Senate is also examining the affair. Axios reported that the White House has not objected to efforts to have Lutnick testify before Congress, and that a widespread belief among Trump's advisers holds that the scandal may be too much for him to survive.

Markets and the US-China track

Nvidia shares fell 13% in the week to 14 November and have lost nearly 25% of their value since the New York Times' first report in late October on Huang's links to a suspected Chinese spy. Trump is scheduled to meet Xi Jinping at the APEC summit in Shenzhen on Thursday, 19 November, during a four-day Asia trip. US officials said the Nvidia affair is unlikely to come up, because it concerns ongoing US national security investigations that Washington does not plan to share with China. Beijing denies that the woman is a spy and says the US uses false espionage charges as a pretext for a technology blockade. Elon Musk of Tesla and SpaceX is expected to travel with Trump to China.