Treasury Secretary Bessent Shifts Blame to Commerce Department Over Megaspeed Scandal

A Public Rift in the Administration

The Trump administration is facing internal friction as Treasury Secretary Scott Bessent has publicly deflected responsibility regarding the government’s failure to penalize Megaspeed, a Singapore-based cloud company currently at the center of a major controversy involving Nvidia. In a recent interview on CNBC, Bessent made it clear that the authority to restrict the firm lies elsewhere, effectively placing the burden on Commerce Secretary Howard Lutnick.

“Commerce has the pen,” Bessent stated during the broadcast, suggesting that reporters should direct their inquiries regarding internal processes and the failure to act to the Commerce Department. The comments follow reports of a tense exchange in the Situation Room, where Bessent allegedly confronted Lutnick over the department’s reluctance to place Megaspeed on the “entity list,” a critical trade blacklist managed by the Commerce Department.

The Megaspeed and Nvidia Connection

Megaspeed has come under intense scrutiny for its role as an Nvidia partner. The company is currently being investigated to determine if its data centers served as a conduit, allowing Chinese entities to bypass US export restrictions and gain access to advanced Nvidia technology. The situation has been further complicated by reports involving Alice Huang, a former high-ranking executive at Megaspeed. US officials have reportedly suspected Huang of acting as a Chinese intelligence asset, a claim that the Chinese government has consistently denied.

The scandal recently reached the highest levels of Nvidia, resulting in the resignation of CEO Jensen Huang. The departure followed a public admission from Huang regarding an affair, though he did not explicitly address the espionage allegations or the specific involvement of Alice Huang in his note to employees.

Concerns Over Technology Leakage

Beyond the personal controversies, Secretary Bessent expressed deep frustration regarding the broader implications for US national security and the global artificial intelligence race. He noted that his department and his deputies have been advocating for action against Megaspeed for several months, citing a persistent “leakage in the system.”

Bessent highlighted that Chinese firms are reportedly obtaining access to chips that exceed the performance capabilities of Nvidia’s H-100 models. He emphasized that President Trump has been explicit in his directive that China should not receive any Nvidia chips superior to the H100 series. “Any leakage is very frustrating, because it hurts our great companies in the AI race and gives the Chinese an advantage,” Bessent remarked.

Focusing on Corporate Accountability

While the media focus has largely remained on the personal life of the former Nvidia CEO, Bessent argued that the narrative should shift toward corporate due diligence. He questioned whether Nvidia had implemented a robust enough effort to vet its clients and ensure that its products were not being funneled through shell companies to restricted markets.

“The real story here should be, did Nvidia know their client?” Bessent asked. He further suggested that the investigation should look into whether any individuals within Nvidia should be held accountable for the potential oversight. As the administration continues to grapple with these security concerns, it remains clear that the departure of Jensen Huang is viewed by the Treasury Secretary as only one chapter in a much larger, ongoing controversy regarding the protection of American technological interests.

Source: businessinsider.com