WASHINGTON: US Treasury Secretary Scott Bessent on Friday blamed the Commerce Department for delaying action to restrict the flow of advanced Nvidia chips to China through Singapore-based Megaspeed International, a company at the centre of a scandal involving the chipmaker's former CEO Jensen Huang.
Speaking on CNBC, Bessent said the Treasury, Defence and State departments, along with the US Trade Representative's office, had supported adding Megaspeed to Washington's export control list for months, but the Commerce Department was responsible for implementing the move.
"But Commerce has the pen, and you will have to ask them about their internal processes," Bessent said. He said he was "frustrated" because President Donald Trump had "made it very clear China should not receive any Nvidia chips above H100s".
Bessent's remarks amounted to an unusually public rebuke of the Commerce Department, which oversees US export controls on sensitive, high-tech goods.
The department is headed by Howard Lutnick, who has come under scrutiny over his reportedly close relationship with Huang.
The New York Times reported on Thursday that Lutnick had resisted imposing tighter restrictions on the sale of Nvidia's advanced chips to China. Chinese firms have reportedly accessed the chips through companies such as Megaspeed.
The Commerce Department did not immediately respond to requests for comment.
Last year, Megaspeed was accused of illicitly shipping advanced Nvidia chips to China. The company denied the allegations in December, saying there was "no evidence" of such exports.
On Thursday, it reiterated that it takes its obligations under American export control laws "extremely seriously" and is committed to working "constructively and transparently" with the US government.
The controversy has also drawn attention to Huang's personal ties with Megaspeed. The company's former executive Alice Huang, with whom Jensen Huang reportedly had an affair, is suspected by US intelligence of being a Chinese spy, according to The New York Times. The two are not related.
Huang resigned on Thursday after the affair came to light. In a November 8 letter to Nvidia employees, he acknowledged the relationship.
Bessent said media coverage had focused excessively on Huang's personal life, diverting attention from questions surrounding Nvidia's business dealings and possible violations of export controls.
"The story thus far has been on Jensen Huang's personal foibles," he said. "The real story here should be: Did Nvidia know their client, and was there a robust effort at Nvidia to make sure that there was no leakage."
He also questioned whether Nvidia had been selling chips to "what were obviously pass-through shell companies", adding that there was "a lot of leakage in the system" and that the administration was working to address it.
Nvidia's board has said it will investigate the matter, while the chairs of three US congressional committees have asked Huang to attend a closed-door briefing on November 18.