US Treasury Secretary Criticizes Commerce Department Over Nvidia Export Oversight

US Treasury Secretary Scott Bessent has publicly faulted the Commerce Department, led by Secretary Howard Lutnick, over delays in stopping sales of advanced artificial intelligence chips to a company suspected of routing hardware to China. Speaking in an interview with CNBC, Bessent stated that multiple government agencies had advocated for months to place the cloud computing firm Megaspeed on the U.S. entity list to block technology transfers.

The dispute centres on export controls governing Nvidia microprocessors, which are subject to restrictions aimed at preventing China from obtaining cutting-edge hardware. Bessent noted that administrative authority over the entity list rests with the Commerce Department, which had not acted despite inter-agency warnings. He added that any leakage of microprocessors above the performance threshold of Nvidia's H100 chip violates explicit directives issued by President Donald Trump.

The public criticism follows internal turmoil at Nvidia following the departure of Chief Executive Jensen Huang. Huang was ousted after disclosures concerning a relationship with a former executive at Megaspeed who was under investigation by American authorities over suspected intelligence activities for China. Bessent stated that scrutiny should focus on whether Nvidia conducted adequate supply-chain verification to prevent hardware sales through intermediary shell entities.

Regulatory procedures allowing specific semiconductor shipments have also drawn scrutiny from lawmakers. Representative Richard E. Neal and Senator Ron Wyden initiated inquiries into rules that permitted advanced H200 semiconductors to reach Chinese buyers if the chips were first shipped from manufacturing sites in Taiwan to the United States for physical inspection and assessed a 25 percent tariff. The Democratic lawmakers stated that the arrangement risked undermining national security controls.

Congressional oversight panels have expanded their investigations into export determinations and internal communications. Republican Senator Tim Scott, chairman of the Senate Banking Committee, stated on social media that recent reports raise serious concerns about our national security and the protection of sensitive US technology. The committee has summoned both Lutnick and Huang to testify in December, while multiple congressional committees have instructed the Commerce Department to preserve all documentation regarding Nvidia export authorizations.

Written by Christiane Hofreiter christiane.hofreiter@alpineweekly.com