Treasury Secretary says administration backs restrictions on Megaspeed amid Nvidia leak concerns

Treasury Secretary Scott Bessent told CNBC's "Squawk Box" that his department and other agencies in the Trump administration have long favored adding Megaspeed, the firm linked to former Nvidia CEO Jensen Huang's scandal, to the entity list. He said the Commerce Department oversees the process and that officials should be asked about its internal procedures.

Bessent’s remarks followed an Axios report that he had questioned Commerce Secretary Howard Lutnick in the White House Situation Room about the latter’s reluctance to impose export controls on companies suspected of diverting Nvidia’s advanced AI chips to China. Lutnick has been described as repeatedly blocking such actions.

Commerce Department spokeswoman Kristen Eichamer told CNBC that no such Situation Room conversation took place. When asked, Bessent said, "We don't repeat conversations in the Situation Room," but reiterated that Treasury, Defense, State and the Office of the U.S. Trade Representative have supported listing Megaspeed for months.

Bessent expressed frustration that President Trump had emphasized that China should not receive Nvidia chips above the H100 model, adding that any leakage "hurts our great companies in the AI race and gives the Chinese an advantage."

Jensen Huang resigned as Nvidia CEO after acknowledging an affair with Alice Huang, a Megaspeed executive whom U.S. intelligence has identified as a Chinese spy. Huang had advocated for easing export restrictions on advanced AI chips. In December, President Trump said Nvidia could sell its H200 chips to approved Chinese customers if the United States received a share of the sales.

When asked whether Nvidia’s top processors might have reached China through Megaspeed, Bessent said he believes there is significant leakage and that the government is working to stop it. He said the focus should be on whether Nvidia knew its client and whether the company took robust steps to prevent such leakage, adding that accountability is needed at the company level.