Nvidia chips China have become the centre of a public dispute inside the Trump administration. US Treasury Secretary Scott Bessent has blamed the Commerce Department, led by Howard Lutnick, for failing to properly oversee exports of high-spec AI chips, including to Megaspeed, a cloud computing firm thought to have links with China. Lawmakers from both parties are now asking questions.
Bessent made the remarks to CNBC, and they are a rare case of internal debate in the administration spilling into public view. Tensions between the two men have reportedly simmered for some time. In 2024 they reportedly competed for the treasury job before Trump returned to the White House, and last year they reportedly clashed over tariff policy, according to US media.
Treasury and Commerce trade blame
Bessent said several agencies “were in favour of putting Megaspeed on the entity list for months.” The entity list is a US list of firms that American companies are barred from working with, and Megaspeed is not on it. Bessent said Commerce “has the pen,” meaning it makes the final call, and he said he was “frustrated” by the delay and by reports of AI chips leaking into China.
Bessent said President Trump had made clear that China should not receive any Nvidia chips above the H100 model. He also questioned whether Nvidia knew who its client was and whether it had done enough to stop chips reaching what he called pass-through shell companies. He said anyone at the company responsible should be held accountable.
Jensen Huang was ousted as Nvidia’s chief executive after reports that he had an affair with a businesswoman who worked for Megaspeed and is allegedly a Chinese spy. Separately, the New York Times reported that Commerce had investigated Megaspeed last year over suspicions it smuggled some Nvidia chips into China. Financial Times reporting said the department was delaying efforts to add the firm to the list. Megaspeed has been contacted for comment.
Congress opens inquiries
Lutnick has been called to testify before the Senate Banking Committee next month about Commerce’s role in allowing Nvidia to export advanced chips. Committee chairman Tim Scott, a Republican, said on X that recent reports raise serious concerns about national security and the protection of sensitive US technology. Other committees have asked Lutnick and his department to keep all records relating to Nvidia and Huang.
Richard Neal and Ron Wyden, the senior Democrats on the Ways and Means and Senate Finance committees, have started investigations into how the chips were allowed to be sold. They said Nvidia’s H200 chips could reach Chinese firms if they were first imported into America from a Taiwan facility for inspection. A 25% tariff, a levy paid to the federal government, was imposed on those chips under a section of the Trade Act, a trade law meant to let the president act against imports that threaten national security. Neal and Wyden said using that law appears to undermine US national security.
It is not yet clear whether Megaspeed will be added to the entity list, and the hearings are still ahead.
Timeline: what has happened so far
- 2024: Bessent and Lutnick reportedly competed for the treasury secretary role before Trump’s return to the White House.
- Last year: Commerce investigated Megaspeed over suspected smuggling of Nvidia chips into China, according to the New York Times.
- Undated: Bessent criticised the Commerce Department on CNBC, and Neal and Wyden started their investigations.
- December: Lutnick is summoned to appear before the Senate Banking Committee, and Huang has also been summoned.
Aasan alfaaz mein
US ke Treasury Secretary Scott Bessent ne kaha hai ke Commerce Department ne Nvidia ke advanced AI chips ki exports ko theek se nahi rokha, aur Megaspeed ka naam is mamle mein aata hai. Is par Trump administration ke andar bahas chal rahi hai aur Congress mein inquiries shuru ho chuki hain. Aam Pakistani ke bill ya price par abhi koi seedha asar nahi bataya gaya. Lekin yeh US aur China ke tech muqabley ka ahem hissa hai, jis ka asar mustaqbil mein chips aur tech services ki qeemat par par sakta hai.
