Treasury Secretary Scott Bessent blames Commerce Department for Megaspeed Entity List delay

Treasury Secretary Scott Bessent has blamed Commerce Secretary Howard Lutnick for failing to place the Singapore-based firm Megaspeed on the Entity List. This delay occurred despite a scandal involving the suspected smuggling of advanced Nvidia AI chips into China. Scott Bessent stated that several agencies, including the Treasury, Defense, State, and the Office of the United States Trade Representative, had favored placing Megaspeed on the Entity List for several months.

Investigation into chip smuggling

The Commerce Department held the final authority regarding the decision to include Megaspeed on the Entity List. Megaspeed is currently suspected of smuggling advanced Nvidia AI chips into China. The Commerce Department was already investigating the suspected smuggling activities of the Singapore-based firm during 2025. Scott Bessent expressed frustration regarding the leakage of AI chips to China, noting that such leaks provide China with an advantage in the global AI race.

The controversy surrounding Megaspeed follows the removal of Jensen Huang from his position as Nvidia CEO. Jensen Huang was ousted following revelations of an affair with Alice Huang, who is alleged to be a Chinese spy. Alice Huang previously worked for Megaspeed. Scott Bessent stated that the focus should be on whether Nvidia knew its client was a shell company and failed to prevent the leakage of chips.

Upcoming Senate testimony

Commerce Secretary Howard Lutnick is scheduled to testify before the Senate Banking Committee in December 2026. The hearing will address the role of the Commerce Department regarding Nvidia chip exports. Congressional committees have requested that Howard Lutnick and the Commerce Department retain all records related to Nvidia and Jensen Huang. Scott Bessent stated that the Commerce Department holds the final authority on the Entity List and should be questioned about its internal processes.

While some reports suggested a confrontation between Scott Bessent and Howard Lutnick in the Situation Room last week, a Commerce Department spokesperson, Kristen Eichamer, denied these reports. Kristen Eichamer stated that Scott Bessent and Howard Lutnick did not have the reported conversation in the Situation Room.

Administrative and policy tensions

The disagreement between the two officials follows a history of professional tension. Scott Bessent and Howard Lutnick reportedly competed for the Treasury Secretary role in 2024. The two officials also reportedly disagreed over administration tariff policy in 2025. Howard Lutnick has reportedly opposed repressive actions against companies suspected of diverting AI chips to China.

The issue of chip exports remains a central focus for the current administration. President Donald Trump has stated that China should not receive any Nvidia chips that are more advanced than the H100 model.

Glossary

• Entity List — The Entity List is a list maintained by the US Department of Commerce. It includes companies and entities that may be subject to specific trade regulations or export controls.
• Office of the United States Trade Representative — The Office of the United States Trade Representative is a government agency. It is one of several agencies that may favor the inclusion of certain entities on the Entity List.
• Senate Banking Committee — The Senate Banking Committee is a congressional committee. It holds hearings to address various issues, such as the role of the Commerce Department regarding chip exports.