Treasury chief cites $4 billion in chip sales in dispute over China export rules

Megaspeed International has purchased more than $4 billion worth of advanced semiconductors from Nvidia. Treasury Secretary Scott Bessent cited this figure on Friday when describing his frustration with the Commerce Department. He stated that his agency, along with the State Department, the Department of Defense, and the U.S. Trade Representative, had supported adding Megaspeed to an export control list for several months. Bessent noted that the Commerce Department holds the primary authority over these matters.

The Treasury Secretary told CNBC that President Donald Trump explicitly stated China should not receive Nvidia chips newer than the H100 model. Bessent referred to the H100 as an older generation of the company’s advanced artificial intelligence processors. He said, “I am frustrated when President Trump made it very clear China should not receive any Nvidia chips above H100s.” Bessent added that Commerce has the pen and that questions regarding internal processes should be directed to that agency.

This public critique from the Treasury Secretary is unusual for the department that oversees U.S. government controls on sensitive high-tech exports. The comments arrive as Nvidia’s connection to Singapore-based Megaspeed International becomes central to the resignation of Nvidia CEO Jensen Huang. The New York Times reported that Huang allegedly had an affair with Alice Huang, the CEO of Megaspeed. U.S. intelligence suspects Alice Huang is a Chinese spy, a claim China has denied.

Commerce Secretary Howard Lutnick faces growing scrutiny due to his reportedly close relationship with Jensen Huang. The Times reported Thursday that Lutnick resisted placing tighter limits on the sale of Nvidia’s more advanced chips to China. Chinese firms accessed these chips through intermediaries like Megaspeed. The split within President Trump’s cabinet reflects the fallout from the scandal engulfing Nvidia. The company’s chips are central to the buildout of artificial intelligence, powering models developed by OpenAI and Anthropic.

The U.S. government has sought to restrict the sale of the most advanced AI chips to China since the Biden administration. This effort aims to protect the technological lead of U.S. companies. However, China has at times retaliated against these measures, creating debate over the extent of the restrictions. The Commerce Department did not immediately respond to messages seeking comment on the situation.

Bessent declined to comment Friday on the Times report that he confronted Lutnick in the White House situation room last week. Separately, Axios reported this week that Lutnick received a classified memo in the spring warning about Jensen Huang’s relationship with a suspected spy. The memo highlighted the nature of the connection between the Nvidia CEO and the Megaspeed executive.

Members of Congress have announced plans to investigate Lutnick’s actions. Several lawmakers called for him to testify on Capitol Hill. On Thursday, Oregon Senator Ron Wyden and Massachusetts Representative Richard Neal wrote to Lutnick. Both are Democrats who serve as the top members of the Senate Finance and House Ways and Means committees, respectively. Their letter demanded that Lutnick preserve all records related to decisions about Nvidia chip exports pending an investigation.

Wyden and Neal wrote that Trump’s approval of advanced Nvidia chip exports to China raises questions about whether political considerations are influencing policy. They asked, “raises critical questions about whether and to what extent political considerations are improperly influencing policy decisions made by the Administration.” Louisiana Senator John Kennedy, a Republican and member of the Senate Banking Committee, said he has questions for the commerce secretary. Kennedy urged Lutnick to hold a press conference to explain his knowledge of the situation.

Kennedy said the Commerce Department approved $4 billion in sales of advanced chips to the company of the spy with whom Jensen Huang had an affair. He asked why the department did so in light of export controls. Kennedy stated that available information indicates this was a decision by the secretary himself. He added that Lutnick should testify before the Senate and should be subpoenaed if necessary.

Jensen Huang resigned Thursday after news of the affair with former Megaspeed executive Alice Huang broke. Last year, Megaspeed was accused of illicitly shipping advanced Nvidia computer chips into China. In December, the company said there was no evidence of such exports. On Thursday, Megaspeed stated it takes its obligation to comply with American export control laws extremely seriously. The company said it is committed to working constructively and transparently with the U.S. government.