Bessent Presses Lutnick on Megaspeed’s China Chip Case

The exchange took place during a Situation Room meeting, as officials weigh whether to restrict sales to Megaspeed, a major Nvidia customer. Bessent pressed Lutnick on the company’s continued absence from the Commerce Department’s entity list. Lutnick did not commit to a specific step, and said he would look into the matter, people familiar with the discussion said.

U.S. officials have raised concerns that Megaspeed may have diverted advanced Nvidia processors to Chinese companies in violation of export restrictions. Estimates cited by officials and analysts put its Nvidia chip purchases at more than $4 billion. Megaspeed has denied wrongdoing and described itself as a company that complies with the law.

The scrutiny has intensified after Nvidia CEO Jensen Huang disclosed an intimate relationship with Alice Huang, who formerly held an executive post at Megaspeed and is suspected by U.S. intelligence personnel of links to Chinese intelligence. Jensen Huang has denied knowing of any espionage activity. Nvidia’s board said it would investigate his disclosure.

Commerce has not added a company to the entity list in more than a year. The list can prevent U.S. companies from supplying designated foreign entities, but targeting Megaspeed could heighten trade tensions with China. Officials have been concerned about the company since 2025, and Lutnick had received a national security warning memorandum, sources said. Megaspeed’s status remains unchanged.

Administration Hesitates as Megaspeed’s China Chip Risk Grows

The central issue is not a routine trade disagreement: U.S. officials suspect Megaspeed may have moved advanced Nvidia chips to Chinese companies in breach of export controls, yet the company remains outside the Commerce Department’s entity list. Treasury Secretary Scott Bessent pressed Commerce Secretary Howard Lutnick about that decision during a Situation Room meeting on November 5. Lutnick did not commit to action.

Megaspeed bought more than $4 billion in Nvidia processors by estimates cited by officials and analysts. Intelligence officials also suspect Alice Huang, a former Megaspeed executive, of links to Chinese intelligence. Nvidia CEO Jensen Huang disclosed an intimate relationship with her and denied knowing of any espionage operation. Nvidia’s board is investigating his disclosure.

The stakes are plain: the entity list can block American firms from supplying designated foreign companies. But concern that action could worsen trade relations with China has accompanied the administration’s deliberations. That is no substitute for addressing the alleged diversion of sensitive technology. Officials have voiced concerns since 2025, and Lutnick received a national security warning memorandum, sources said. Megaspeed denies wrongdoing. Its continued exclusion leaves the administration’s response to the alleged risk in question.

Bessent’s Push Risks Turning Chip Allegations Into China Flashpoint

A national security allegation is now colliding with the administration’s effort to manage trade relations with China. The Treasury chief questioned the Commerce chief on November 5 about why Megaspeed had not been put on the entity list, which can bar U.S. companies from supplying designated foreign entities. Lutnick made no immediate commitment to take action.

Officials suspect Megaspeed may have diverted advanced Nvidia chips to Chinese companies in violation of U.S. export restrictions. But Megaspeed denies wrongdoing and says it operates lawfully. The company has purchased more than $4 billion in Nvidia processors by some estimates, and its designation could inflame already-sensitive relations with Beijing.

The dispute has gained urgency amid scrutiny of Nvidia CEO Jensen Huang’s relationship with Alice Huang, a former Megaspeed executive suspected by U.S. intelligence officials of links to Chinese intelligence. Jensen Huang has denied knowledge of an espionage operation; Nvidia’s board is investigating his disclosure of the relationship.

The administration must weigh the alleged technology risk against the consequences of a new restriction. Commerce has made no additions to its entity roster for over a year, and officials have been concerned about Megaspeed since 2025. The company remains off the list, while the allegations remain denied.