WHAT YOU NEED TO KNOW
  • Scott Bessent said the Commerce Department was responsible for delayed action against Megaspeed over Nvidia chip sales to China.
  • Howard Lutnick agreed to testify voluntarily before the Senate Banking Committee as lawmakers demand answers about export controls.
  • Jensen Huang resigned following reports involving a suspected Chinese spy and another Nvidia executive.
  • Lawmakers are pressing for tighter restrictions on advanced artificial intelligence chip exports to China.

The White House blame game over Nvidia’s spy scandal burst into public view Friday as Treasury Secretary Scott Bessent pointed directly at the Commerce Department. His remarks placed fresh pressure on Commerce Secretary Howard Lutnick as Capitol Hill scrutiny intensifies.

Lutnick has faced mounting questions over his reported failure to restrict sales of advanced Nvidia chips to China. The controversy followed reports that Nvidia CEO Jensen Huang was in a relationship with a suspected Chinese spy.

Huang resigned Thursday after reports about that affair and another involving an Nvidia executive who reported to him at the time. Lutnick has now agreed to testify before the Senate Banking Committee about the administration’s handling of chip exports.

Bessent was asked on CNBC’s “Squawk Box” about the delay in blacklisting Megaspeed, a Singapore based company where the suspected spy was a top executive. Megaspeed purchased Nvidia chips and had been accused of helping China evade export control rules.

“Commerce has the pen,” Bessent said. He maintained that the Treasury, War and State departments, along with other top agencies, had supported blacklisting Megaspeed for months.

“You will have to have to ask them about their internal processes,” Bessent said of the Commerce Department. The public finger pointing arrived amid reports that President Donald Trump is considering whether to fire Lutnick over the scandal.

The White House has so far continued to stand by Lutnick. Still, Bessent appeared to suggest that the Commerce Department had not followed Trump’s wishes regarding which chips could be sold to China.

“I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above A100s,” Bessent told CNBC on Friday. The Commerce Department did not immediately respond to MS NOW’s request for comment about those remarks.

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Lutnick will appear before the Republican led Senate Banking Committee as concerns grow that the Trump administration prioritized the interests of private technology companies over national security. His testimony will give senators an opportunity to press him directly about the department’s decisions.

“Secretary Lutnick has proactively agreed to appear voluntarily before the Banking Committee to address their questions,” a Commerce Department spokesperson told MS NOW. Several Republican lawmakers have demanded answers about the delay in taking action on chip sales.

Sen. John Curits of Utah, who sits on the Senate Commerce Committee, said both Huang and Lutnick must face accountability. He questioned whether the Commerce Department was acting for the American public after reports that Lutnick stalled export controls.

“Jensen Huang’s gross negligence exposed cracks in our national security, but Secretary Lutnick’s reported stalling on export controls raises the question of whether the Commerce Department is acting in the best interests of the American people,” Curits wrote Friday on X. “We need answers and accountability from both immediately.”

House Speaker Mike Johnson, a close Trump ally, said there was a “developing consensus” around limiting chip exports to China. He said the issue “has been a big issue” on Capitol Hill.

The bipartisan Select Committee on China is pushing for new restrictions in the next National Defense Authorization Act. The Commerce Department oversees the agency responsible for approving exports of advanced artificial intelligence chips and semiconductors.

Lawmakers and national security experts have criticized the department’s chip export policies since Lutnick took control. Those concerns intensified after reports that the Commerce Department approved Megaspeed’s purchase of advanced Nvidia chips earlier this year.

The department abruptly stopped an investigation into Megaspeed last year and transferred the case to the Justice Department, according to a New York Times report cited by MS NOW. The report relied on current and former government officials and other people familiar with the incident.

“Apparently the Department of Commerce greenlit the sale of $4 billion in advanced chips to the spy’s company,” Sen. John Kennedy of Louisiana said on CNN after Huang’s resignation. “I mean, why were they selling the chips?”

Kennedy said he wanted to hear from both Bessent and Lutnick. His demand added to the bipartisan pressure surrounding the administration’s handling of advanced chip exports and the reported approval involving Megaspeed.

Lutnick has echoed Huang’s friendly position on exporting advanced artificial intelligence chips to China. That stance has at times put him at odds with top Trump administration officials seeking strict controls on the cutting edge technology.

Since joining Trump’s Cabinet, Lutnick has maintained a close relationship with the former Nvidia CEO. Now, with Bessent publicly directing responsibility toward Commerce and senators preparing questions, Lutnick faces a highly visible reckoning over the administration’s chip export decisions.