US treasury, commerce chiefs clashed at White House over sanctions on firm tied to Jensen Huang scandal

Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick clashed at the White House over whether to sanction Megaspeed, a Singapore-based company linked to the so-called Jensen Huang scandal involving Nvidia's CEO, according to reports.

The New York Times and Axios reported Wednesday (local time) that Bessent confronted Lutnick at a White House Situation Room meeting on Nov. 5, demanding to know why Megaspeed had not been placed on the Commerce Department's entity list.

When Bessent asked how Megaspeed could still be off the entity list, Lutnick hesitated before responding, "I don't know. I'll look into it," Axios reported.

The New York Times reported that Lutnick told Bessent the Commerce Department could now move quickly to impose export restrictions on Megaspeed.

Megaspeed has been buying large volumes of Nvidia's AI chips and operating data center projects in Southeast Asia for customers including Chinese clients. The United States has restricted exports of advanced AI chips to China since late 2022, and US authorities have been investigating whether Megaspeed circumvented those controls to illegally ship Nvidia chips to China.

The controversy intensified after it emerged that Nvidia CEO Jensen Huang had been in a romantic relationship with Alice Huang, a former Megaspeed executive. Reports that US intelligence agencies consider Alice Huang a spy for China's Ministry of State Security have amplified concerns about the leakage of advanced semiconductor technology to China and fueled calls for tighter export controls.

Companies on the Commerce Department's entity list require prior US government approval before receiving American products. Yet despite White House and intelligence officials pushing for action against Megaspeed since last fall, Lutnick and senior Commerce Department officials are said to have resisted those calls.

Adding Megaspeed to the entity list had been discussed at a deputy-level meeting earlier, but Undersecretary of Commerce Jeffrey Kessler reportedly deferred the decision, saying it was for Lutnick to make. The Commerce Department's repeated delays fueled frustration within the administration and ultimately led to the confrontation between the two secretaries, The New York Times reported.

A Commerce Department spokesperson denied the clash, saying Bessent and Lutnick "did not have that conversation." The spokesperson also said decisions on entity list designations are made at the administration level, not by the Commerce Department alone.

The dispute surfaced as the Jensen Huang scandal has put the Trump administration's semiconductor export control policy under scrutiny. Lutnick is reported to have seen a classified administration memo warning about the relationship between Jensen Huang and Alice Huang before it became public. Secretary of State Marco Rubio is said to have briefed President Donald Trump on the memo when Trump traveled to China in May.

The revelation that the Commerce Department approved Nvidia chip sales to China and delayed action against Megaspeed despite all this has deepened the controversy over the administration's response. According to the Financial Times, multiple Trump administration agencies had pushed for Megaspeed's entity list designation, but the Commerce Department sought to slow new additions to the list over the past two months. The department's position, according to the report, was that some companies required further investigation.