Treasury Secretary Scott Bessent said four federal agencies pushed for months to place cloud computing firm Megaspeed on a trade blacklist, and blamed Commerce Secretary Howard Lutnick for the delay. His comments, made to CNBC on Friday, escalate a Cabinet-level rift over the company at the center of Nvidia ex-CEO Jensen Huang's affair with a suspected Chinese spy.

What did Bessent say?

"There was coordination. Treasury, War, USTR, and State were in favor of putting Megaspeed on the entity list for months," Bessent told CNBC. "But Commerce has the pen…You will have to ask them about their internal processes."

The entity list is a U.S. government register of companies barred from receiving American exports. The Treasury Department was among the federal agencies favoring trade restrictions on Megaspeed, but the final decision rested with Lutnick, Bessent confirmed.

The Justice Department is investigating Megaspeed for suspected violations of U.S. export controls, which prohibit certain U.S.-made chips from being sold or shipped to China. According to The Information, Megaspeed and its Malaysian subsidiary Speedmatric, both helmed by the alleged spy Alice Huang, shipped at least $7.5 billion in Nvidia chips to China over two years.

Why is Lutnick under pressure?

Axios reported that Lutnick spent months "undoing" efforts to hold Megaspeed accountable for potential export control violations. Bessent confronted Lutnick in the Situation Room following the midterm elections over the failure to blacklist the company, according to the outlet.

Pressed on that confrontation, Bessent told CNBC: "We don't repeat conversations in the Situation Room."

The New York Times reported a parallel episode involving Oracle. When Trump administration officials approached the company about cancelling a $7 billion deal to lease chips to Chinese tech conglomerate Tencent, Lutnick's top deputy Jeff Kessler said the commerce secretary had issues with a cancellation because it would halt the shipment of 100,000 advanced Nvidia AI chips. Lutnick reportedly said he did not understand the rush to scrap the deal.

The Commerce Department and Nvidia did not immediately respond to requests for comment.

What are lawmakers demanding?

Republican and Democratic lawmakers alike want Lutnick held accountable for keeping Megaspeed off the blacklist.

"The obvious question is why did he choose to sell advanced chips?" Republican Louisiana Sen. John Kennedy told Politico. "Secretary Lutnick needs to answer that in front of God and country."

Lutnick has agreed to testify alongside Jensen Huang before the Senate Banking Committee on Dec. 10 to address national security concerns.

Could Lutnick lose his job?

Reuters reported that senior White House officials are weighing whether to oust the commerce secretary. Even before news of Huang's affair broke, Lutnick's decision not to add 100 companies, including China's DeepSeek, to the entity list had already put him in hot water, according to Reuters.

What conflicts of interest have surfaced?

The Times reported that Lutnick argued with senior White House officials that export regulations against China would stoke the trade war, and he insisted on speaking directly with President Donald Trump about China's restricted access to U.S. chips.

Lutnick also maintained a friendly relationship and financial ties with Nvidia, strengthening concerns about favoritism. "Howard is the person I talk to most in the administration—he's on top of the technology and learning the industry quickly," Huang said in September 2025.

Before joining the Cabinet, Lutnick served as CEO and chairman of investment bank Cantor Fitzgerald, which held approximately $1.2 billion in Nvidia stock prior to Trump's second term, according to SEC filings.