A dispute inside the Trump administration over advanced chip exports has moved into public view. Treasury Secretary Scott Bessent said on Friday that the Commerce Department has been slow to designate Megaspeed, a customer of Nvidia, as a potential national security risk.
The remarks come amid fallout from the resignation of Nvidia chief executive Jensen Huang, and as some of President Donald Trump's advisers have reportedly started talking about whether Commerce Secretary Howard Lutnick should keep his job, according to reporting from CNN published by WXOW.
Bessent Says Commerce Held Up a Blacklisting
In an interview on CNBC, Bessent said a broad group of agencies, including Treasury, the State Department, the Pentagon and the US Trade Representative, supported adding Megaspeed to an export blacklist.
He placed responsibility for the lack of action on the Commerce Department under Lutnick. "Commerce…has the pen. You would have to ask them about their internal processes," Bessent said.
CNN said it had contacted the Commerce Department for comment.
Concerns About Chips Reaching China
Bessent framed the issue as a departure from the president's instructions. He said Trump had made clear that China should not receive Nvidia chips above a certain level of technology.
He argued that any leakage of such chips damages American companies competing in artificial intelligence and hands an edge to China.
Administration officials have long suspected that Megaspeed sidestepped US law to move advanced chips into China. Treasury staff argued that this should place the company on Commerce's entity list, which identifies China-linked firms considered possible national security threats.
The Huang Connection
The matter drew fresh scrutiny after public reports that Huang had an affair with Alice Huang, a Megaspeed executive suspected of having ties to Chinese intelligence.
Senior officials, Lutnick among them, were briefed on the relationship months ago, according to the report. People familiar with the matter said Commerce has still declined to add Megaspeed to the entity list.
Tension in the Situation Room
CNN previously reported that Bessent confronted Lutnick during a tense Situation Room meeting last week over Commerce's reluctance to act. Lutnick did not immediately commit to any particular step, according to that account.
Asked about the exchange on Friday, Bessent did not dispute it, saying only that officials do not repeat conversations held in the Situation Room.
Questions Over Lutnick's Future
People familiar with internal discussions said some Trump advisers have begun debating whether Lutnick should be dismissed. Two others said Trump has taken calls from administration officials and outside advisers voicing alarm about the commerce secretary.
For now, the White House has backed Lutnick. A statement issued Thursday, before Bessent's interview, said Trump retains complete confidence in him. The two are longtime friends, and sources said it remained unclear what the president would decide.
What It Means for the Chip Industry
The episode highlights how much weight export controls now carry for semiconductor companies selling into global markets. Decisions about which customers land on the entity list can shape where advanced AI hardware ends up.
For hardware makers and their customers, the public split suggests that enforcement of chip export rules may face closer scrutiny, and that the agencies involved do not always move in step. How Commerce handles Megaspeed, and whether Lutnick stays in his post, will be watched closely across the industry.
Source: WXOW
