US Treasury Secretary Scott Bessent has publicly criticized the Commerce Department for failing to blacklist Megaspeed, a Singapore-based company at the center of a scandal involving Nvidia chip exports to China. In an interview with CNBC, Bessent stated that Treasury, along with the Defense Department, the US Trade Representative's office, and the State Department, had supported adding Megaspeed to the trade blacklist for months.
Bessent expressed frustration with the Commerce Department's inaction, citing President Donald Trump's directive that China should not receive Nvidia chips above H100s. He emphasized that any leakage of these chips hurts US companies and gives China an advantage in the AI race. The Commerce Department is led by Secretary Howard Lutnick, who has not publicly commented on the issue.
Megaspeed is suspected of helping Chinese firms circumvent US export controls by purchasing Nvidia chips for its data centers in Southeast Asia and routing them to China. According to reports, the company traded over $4 billion worth of Nvidia chips over two years. The company's former director, Alice Huang, has been identified as an alleged Chinese intelligence asset with ties to Nvidia CEO Jensen Huang.
Jensen Huang resigned as Nvidia CEO on Thursday, following the revelation of an extramarital affair with Alice Huang. In a letter to Nvidia employees, Huang acknowledged the affair but did not name the woman involved. Nvidia's board has launched an investigation, and three US Congress committee chairs have requested Huang's attendance at a closed-door briefing on November 18.
Bessent shifted the focus from Huang's personal life to the company's responsibility in ensuring compliance with export controls. He questioned whether Nvidia had been selling chips to "obviously pass-through shell companies" and emphasized the need for accountability within the company. Bessent also highlighted the broader issue of leakage in the system, which the administration is working to address.
The scandal has sparked concerns about the effectiveness of US export controls and the role of companies like Nvidia in enforcing these regulations. As the investigation unfolds, it is likely to have significant implications for the tech industry and US-China relations. The incident has also raised questions about the oversight and regulation of AI technology exports.
The US government is taking steps to prevent similar incidents in the future, including strengthening export controls and enhancing scrutiny of companies involved in AI technology trade. The outcome of the investigation and any subsequent actions will be closely watched by industry stakeholders and policymakers.
Key points
- US Treasury Secretary Scott Bessent criticizes Commerce Department for inaction on blacklisting Megaspeed.
- Megaspeed suspected of helping Chinese firms circumvent US export controls on Nvidia chips.
- Jensen Huang resigns as Nvidia CEO amid scandal over extramarital affair and alleged ties to Chinese intelligence asset.
