Key points
- Scott Bessent said Treasury, Defense, State, and USTR backed blacklisting Megaspeed for months
- Bessent said Howard Lutnick's Commerce Department is in charge of the entity list
- Lutnick has agreed to testify before the Senate Banking Committee, his spokesperson said
Treasury Secretary Scott Bessent said on Nov. 13 that the Treasury, Defense, and State departments and the Office of the US Trade Representative all "were in favor of putting Megaspeed on the entity list for months." The Commerce Department is in charge of that list, Bessent told CNBC, "and you will have to ask them about their internal processes."
Megaspeed is the Singapore-based Nvidia (NVDA) customer at the center of the scandal that led Jensen Huang to resign as Nvidia's CEO on Nov. 12. Megaspeed has bought more than $4.8 billion of advanced Nvidia AI chips over the past two years. The entity list is the Commerce Department's export blacklist, and it subjects listed companies to US export license requirements for specified items.
"OFAC has no control over things like this, in terms of exports," Bessent said, referring to Treasury's sanctions office. He called it "a BIS decision," meaning Commerce's Bureau of Industry and Security, Reuters reported.
Asked whether he was frustrated, Bessent said, "I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H100s." Any leakage, he said, "hurts our great companies in the AI race" and gives China an advantage.
Bessent wouldn't discuss a reported Situation Room clash
Bessent pressed Commerce Secretary Howard Lutnick at a White House Situation Room meeting last week on why Megaspeed hadn't been added to the entity list, Axios reported on Nov. 11. Lutnick said he would "look into it," according to the report.
Commerce denied it. "This is false. Secretary Bessent and Secretary Lutnick had no such conversation," department spokesperson Kristen Eichamer told Axios. Asked about the meeting on Nov. 13, Bessent said, "We don't repeat conversations in the Situation Room."
Megaspeed said on Nov. 12 that it would cooperate with US investigators.
Lutnick agrees to Senate testimony
Lutnick has agreed to appear voluntarily before the Senate Banking Committee, Eichamer told NBC News on Nov. 12. Committee Chairman Tim Scott asked Lutnick to testify on Dec. 10 and Huang on Dec. 3.
Nvidia shares were down 3.6% at $160.27 at 11:31 a.m. ET on Nov. 13, from the Nov. 12 close of $166.19.
