Bessent blames Lutnick’s Commerce as he slams Nvidia chip ‘leakage’ to China

Treasury Secretary Scott Bessent said on Friday that his department and others in the Trump administration have long supported putting Megaspeed on the entity list, a restriction on exports. He said the Commerce Department controls that decision. "You will have to ask them about their internal processes," Bessent told CNBC's "Squawk Box."

Bessent's remarks followed an Axios report that he asked Commerce Secretary Howard Lutnick in the White House Situation Room last week why Lutnick had resisted implementing export controls, especially on Megaspeed. Axios reported that Lutnick has "repeatedly stood in the way" of cracking down on companies suspected of diverting Nvidia's advanced AI chips to China. A Commerce Department spokeswoman, Kristen Eichamer, told CNBC on Wednesday that the two officials had "no such conversation" in the Situation Room. Bessent declined to confirm the exchange. "We don't repeat conversations in the Situation Room," he said.

Bessent said the Treasury, Defense and State departments and the Office of the U.S. Trade Representative "were in favor of putting Megaspeed on the entity list for months." He said he was frustrated by chip leakage to China. "Any leakage is very frustrating," he said, because it "hurts our great companies in the AI race" and "gives the Chinese an advantage."

Bessent said there is "a lot of leakage in the system" and that the government is working to close it. He also questioned whether Nvidia knew its clients. "Did Nvidia know their client, and was there a robust effort at Nvidia to make sure that there was no leakage," he said, adding that anyone at the company should be held accountable.

Jensen Huang resigned as Nvidia CEO on Thursday after admitting to an affair. The admission followed scrutiny of his relationship with Alice Huang, a Megaspeed executive whom U.S. intelligence reportedly determined to be a Chinese spy. In December, Trump said Nvidia could sell its H200 chips to approved Chinese customers, provided the U.S. receives a percentage of the sales.

Sen. Tim Scott, R-S.C., said Huang and Lutnick have been asked to testify before the Senate Banking Committee next month. Huang has also been asked to attend a closed-door briefing before multiple House committees on Dec. 1. The Commerce Department did not immediately respond to CNBC's request for comment on Bessent's remarks.