Bessent and Lutnick Clash Over Nvidia Client Megaspeed and Security Risks
Treasury Secretary Scott Bessent challenges Howard Lutnick over the refusal to label Megaspeed as a national security threat involving Chinese chip access.
POLICY WIRE — Washington, D.C. — Treasury Secretary Scott Bessent recently confronted Commerce Secretary Howard Lutnick during a high-stakes meeting in the White Situation Room last week.
The dispute centered on the Commerce Department’s perceived hesitation to designate Megaspeed, a major customer of Nvidia, as a potential threat to U.S. national security.
Officials within the Trump administration have long suspected that Megaspeed bypassed American regulations to deliver high-end semiconductors to China. Treasury staff have argued that the firm be placed on the Commerce Department’s entity list, which tracks Chinese-linked organizations deemed risky to national security.
The controversy reached a boiling point following admissions from Nvidia CEO Jensen Huang, who acknowledged a romantic relationship with a Megaspeed staff member suspected of acting as a Chinese operative.
Sources indicate that senior officials, including Lutnick, received briefings months ago regarding Huang’s connection to Alice Huang. As an executive at Megaspeed, the intelligence community has suspected her of being a spy for China.
Despite these intelligence warnings, the Commerce Department has declined to add Megaspeed to the restricted entity list.
When Bessent raised the issue last Thursday, Lutnick reportedly did not provide a definitive commitment to any specific upcoming regulatory actions against the company.
Megaspeed is currently headquartered in Singapore, but began its operations in 2015 as a Chinese video game developer named 7Road International. Since Alice Huang became a director three years ago and the firm rebranded, it evolved into a massive purchaser of technology.
Analysts estimate the firm has spent upwards of $4 billion on Nvidia semiconductors within the Asian market. Megaspeed has rejected all claims of illicit activity, asserting that it operates as a compliant and legal entity.
The entity list serves as a primary mechanism for the U.S. to block technology sales to sensitive foreign groups. However, listing Megaspeed could complicate trade relations with China under the current administration, as the Commerce Department has not issued any new additions to the list in over twelve months.
Representatives for both the Treasury and Commerce departments did not immediately provide statements regarding the internal disagreement.
Reporting by Policy-Wire (PW)
