U.S. Treasury Secretary Scott Bessent said on Friday that his department had for months advocated placing Singapore cloud provider Megaspeed on a blacklist, but that the ultimate authority to impose such trade restrictions rested with the Commerce Department. Bessent made the remarks in a CNBC interview and sought to distinguish his department from other agencies accused of lapses.
OFAC, BIS and which agencies decide
Bessent noted that the Treasury’s Office of Foreign Assets Control (OFAC) does not have authority over export restrictions. Decisions about companies subject to trade controls fall to the Commerce Department’s Bureau of Industry and Security (BIS). He added that the Federal Trade Commission (FTC) also could have imposed restrictive measures against the Singaporean company.
He blames Nvidia for insufficient partner due diligence
The Treasury chief sharply criticized Nvidia Corporation, saying the company did not sufficiently vet its partners before the chip-smuggling and espionage scandal erupted. According to Bessent, the central question is whether the chipmaker truly knew its customers and whether it took meaningful steps to prevent its technology from flowing out through companies that appeared to serve as intermediaries.
Bessent said those at Nvidia who failed to perform adequate partner screening should be held accountable.
Circumstances around Megaspeed and the broader scandal
Megaspeed attracted attention after Jensen Huang, Nvidia’s chief executive, unexpectedly stepped down this week. Media reports indicated that Huang had a relationship with Alice Huang, a former Megaspeed executive whom U.S. authorities suspect of spying for China.
In response to the scandal, lawmakers have pushed for tighter restrictions to block advanced AI chips from reaching China.
Political fallout and next steps for controls
The controversy has spilled into politics and could affect members of the Trump administration, with questions arising about how effectively the government monitored chip exports to China — including scrutiny of Howard Lutnick, the Commerce Secretary. Bessent said the administration is working to close loopholes in the chip export-control system.
Asked whether Congress must act to tighten export controls, Bessent replied decisively no, arguing the executive branch already has the legal authorities necessary and must apply existing rules.
Additional note
An AI assistant participated in preparing this article; a journalist edited and verified the final text.
Tags: China, artificial intelligence, espionage, chip, Nvidia, Trump administration, export controls, Scott Bessent, Howard Lutnick, Jensen Huang
