After blaming Commerce Secretary Howard Lutnick for not blacklisting a company suspected of funneling AI chips to China, Treasury Secretary Scott Bessent put Nvidia on blast.
The Treasury Department and other federal agencies were in favor of placing trade restrictions on Megaspeed, the cloud computing company at the center of Jensen Huang’s affair with an alleged Chinese spy.
“Treasury, War, USTR, and State were in favor of putting Megaspeed on the entity list for months,” Bessent told CNBC on Friday. “But Commerce has the pen.”
To help preserve the U.S. lead over China in the AI race, the Trump administration has blocked exports of certain high-end chips, including Nvidia’s, while allowing lesser models.
In an interview on Fox News’ Sunday Morning Futures, he was asked why Megaspeed wasn’t blacklisted. The Singapore-based company and its Malaysian subsidiary shipped at least $7.5 billion in Nvidia chips to China over two years, The Information reported.
Bessent pivoted away from the Commerce Department’s role and replied that what’s more important is “whether Nvidia had a culture of compliance around the U.S. export restrictions.”
He added that he also wants to know if compliance failures originated at a low level, somewhere in the middle, or up in the C-suite.
“These shell companies were obvious. They were being investigated, and did Nvidia use them as a workaround to sell chips to the Chinese?” Bessent asked. “And I think we’re going to see answers. There’s a strong independent lead director. They brought in outside counsel, and I think we’re going to get an explanation on this culture of non-compliance at Nvidia.”
On Thursday, Nvidia announced that Huang had stepped down as CEO. The company also named CFO Colette Kress as the interim CEO during the search for a replacement and appointed Harvey Jones as Nvidia’s first-ever board chair.
Kress is considered a possibility as a permanent CEO as well as Ian Buck, a top engineer at Nvidia. But outsiders like AMD CEO Lisa Su and Arm CEO Rene Haas are seen as potential candidates too.
Meanwhile, sources told the Financial Times that Huang has discussed with confidantes the possibility of returning to Nvidia, with one ally saying ‘war room’ of Silicon Valley executives is coming together to lobby for his return. Elon Musk and other executives are already circulating a public letter to bring back Huang.
Bessent said Sunday that he thinks Nvidia’s board should go outside the company for a new CEO, adding that it needs a “dramatic shakeup.”
While he called Nvidia a “wonderful company” and Huang an “incredible innovator,” that doesn’t absolve them of obligations to comply with export rules.
“I can tell you that if this were a bank and they hadn’t complied like this, the OCC would be in there right now and a lot of the executives would be removed,” Bessent said, referring to the Office of the Comptroller of the Currency.
He also insisted it doesn’t matter whether Alice Huang, who had a romantic affair with the former Nvidia CEO, is actually a spy for China.
Instead, Bessent turned the focus back on the culture at Nvidia and whether it used “seemingly illicit sales to goose their revenues and their earnings.”
Nvidia didn’t immediately respond to a request for comment.
For its part, Megaspeed said in a statement that it conducts legitimate and lawful business but has retained external legal counsel to conduct an internal investigation.
“Megaspeed designs and maintains its global operational and supply-chain control frameworks to comply with all applicable laws and regulatory regimes, including United States export control requirements and local jurisdiction rules in every market where we operate,” it said.
Megaspeed added that Alice Huang left the company effective Aug. 30, 2025 and currently has no role with there, while declining to comment on her personal and private matters.
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