Treasury Secretary Scott Bessent on Friday accused the Commerce Department of a delay in labeling Nvidia customer Megaspeed a possible national security threat, publicly airing an ongoing administration blame game following the ouster of Nvidia CEO Jensen Huang.
His comments come as some of President Donald Trump’s advisers, reeling from the fallout of Huang’s resignation, have begun discussing whether Commerce Secretary Howard Lutnick should be dismissed, according to people familiar with the conversations. Trump himself has also fielded calls from administration officials and outside advisors raising alarm bells about Lutnick, two additional people said.
So far, the White House has stood by him, issuing a statement Thursday – before Bessent’s comments – saying Trump “maintains complete confidence in the secretary and his ability to carry out the position as the most transformative Commerce Secretary in modern history.” Trump and Lutnick are longtime friends, and sources said it was unclear what the president might do.
Speaking on CNBC, Bessent said a wide swath of Trump’s administration — including the Treasury and State departments, the Pentagon and the US Trade Representative — favored placing Megaspeed on an export blacklist.
He said it was the Commerce Department, led by Lutnick, that had failed the follow through.
“Commerce…has the pen. You would have to ask them about their internal processes,” he said.
He suggested the inaction had violated directives given by Trump.
“I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above A100s,” he said, referring to an entry-level chip.
“And so any leakage is very frustrating because it hurts our great companies in the AI race, gives the Chinese an advantage,” he went on.
CNN has reached out to the Commerce Department for comment.
Trump officials have long harbored concerns that Megaspeed has circumvented US law and funneled advanced chips into China — a prospect that Treasury staffers argued should land it on Commerce’s so-called entity list of China-connected companies that could pose national security risks.
But the issue gathered newfound attention and importance in recent days when it was reported publicly that Huang had an affair with a Megaspeed employee suspected of having intelligence connections to China.
Senior Trump officials, including Lutnick, were briefed months ago about Huang’s relationship with Alice Huang, the Megaspeed executive.
Despite those warnings, Commerce has so far refused to put Megaspeed on the entity list, people familiar with the matter said.
In a tense Situation Room meeting last week, Bessent challenged Lutnick over his department’s reluctance to blacklist Megaspeed, CNN previously reported. Lutnick did not immediately commit to taking any specific action, they said.
In the interview Friday, Bessent did not deny the confrontation .
“We don’t repeat conversations in the Situation Room,” he said.
