Cabinet Divisions Emerge Over Export Controls
Appearing on CNBC's Squawk Box, Treasury Secretary Bessent stated that multiple government agencies had favored placing cloud computing firm Megaspeed on the federal entity list for months. However, he laid responsibility for the delays directly on Commerce Secretary Howard Lutnick's agency, noting that "Commerce has the pen." Bessent expressed frustration over reported leakages of advanced AI chips to China, emphasizing that President Trump had made it clear that Beijing should not receive chips above the H100 tier.
The friction highlights mounting pressure on Lutnick's department. The Commerce secretary has already been summoned to testify before the Senate Banking Committee next December regarding export oversight. In addition, congressional leaders from both parties have demanded that the Commerce Department preserve all records concerning Nvidia, former CEO Jensen Huang, and decisions permitting advanced chip sales to Chinese entities.
Broader Investigations and Accountability
The expanding scrutiny follows revelations surrounding former Nvidia CEO Jensen Huang, who stepped down after disclosures regarding a personal relationship with a former Megaspeed executive alleged to be a Chinese spy. While Megaspeed faced prior federal smuggling probes, it was never added to the government's restricted trade list, drawing intense oversight from lawmakers including Senate Banking Committee Chairman Tim Scott, alongside congressional inquiries led by figures such as Richard E. Neal and Ron Wyden.
Beyond institutional oversight of the Commerce Department, Bessent also directed criticism toward Nvidia itself, questioning whether the tech firm exercised sufficient due diligence to ensure its high-end processors were not sold to pass-through shell companies.
