A tense clash erupted in Trump’s Situation Room as Scott Bessent grilled a top official over why a company accused of supplying China with U.S. technology escaped sanctions.
Bessent put Commerce Secretary Howard Lutnick on the spot during Thursday’s gathering, confronting him over the failure to blacklist Megaspeed, a major Nvidia customer at the center of an escalating national security scandal, sources familiar with the exchange told Axios.
The confrontation comes as Trump’s buddy and Nvidia CEO Jensen Huang faces mounting scrutiny over his affair with Alice Huang, a former Megaspeed executive whom U.S. intelligence officials have identified as a suspected Chinese intelligence operative.
Huang has been embraced by Trump.
Megaspeed is under investigation over suspected shipments of advanced Nvidia chips to China. The company reportedly purchased more than $4.8 billion worth of the processors, raising concerns they may have been diverted to Chinese firms in breach of U.S. export restrictions.
Alice Huang is accused of using her connections with Jensen Huang and Nvidia distributors to help secure the chips for Chinese companies.
Nvidia disclosed Sunday that its board would investigate Huang, 63, after he informed directors of his intimate relationship with Alice Huang. Huang has denied having any knowledge of an espionage operation.
During Thursday’s meeting, Bessent reportedly demanded to know why Megaspeed remained off the government’s blacklist despite mounting concerns about its activities.
“How come Megaspeed isn’t on the entities list?” he asked, according to a source briefed on the discussion.
Lutnick appeared caught off guard by the question, initially struggling to respond before telling the Treasury secretary: “I don’t know. I’ll look into it.”
Alice Huang and Jensen Huang in a picture posted on her WeChat account.
The Daily Beast has contacted the White House for comment.
According to sources who spoke to Axios, Lutnick has spent much of the past year reversing or obstructing attempts by other administration officials to impose consequences on Megaspeed. His reluctance reportedly stemmed from fears that targeting the company could inflame already-sensitive trade relations with Beijing.
That resistance allegedly continued despite Lutnick receiving a detailed warning memorandum prepared by National Security Adviser and Secretary of State Marco Rubio, which laid out the national security concerns surrounding Megaspeed.
Officials from the White House and intelligence agencies have reportedly been pushing the Commerce Department to intervene since autumn 2025. Yet the company remained outside the government’s restricted entities framework.
Jensen Huang had admitted being unfaithful to his wife of more than 40 years, Lori.
The New York Times reported Tuesday that Commerce Undersecretary Kessler had abruptly halted an investigation into Megaspeed following intervention from Nvidia.
Meanwhile, Huang has continued to enjoy the support of his powerful political ally in the White House.
Trump publicly defended the Nvidia chief when questioned about the controversy, describing him as an honorable businessman and suggesting he might have a legitimate explanation for the allegations.
“He’s a fine person, in my opinion,” Trump said. “I think he’s an honorable guy, I think he probably has an excuse for it.”
The president added that Huang had “done an amazing job for our country.”
According to The New York Times, American officials briefed Trump in May about Alice Huang’s alleged links to the Chinese government and major U.S. semiconductor manufacturers
Despite the warnings, Trump reportedly brought Jensen Huang along on his subsequent trip to China later that month.
The post Trump Goons’ Tense Situation Room Clash Is Leaked appeared first on The Daily Beast.
