Scott Bessent Critiques Commerce Department for Delaying Megaspeed Blacklist
In a recent development, U.S. Treasury Secretary Scott Bessent has publicly criticized the Commerce Department, led by Secretary Howard Lutnick, for delaying the blacklisting of Megaspeed International. This Singapore-based cloud computing firm is suspected of funneling advanced Nvidia AI chips to China, raising national security concerns.
Bessent claims that four federal agencies have supported the move to add Megaspeed to the Entity List for months, yet the Commerce Department has not acted. He stated, “Commerce has the pen,” emphasizing that the responsibility for the delay lies solely with this agency.
The controversy intensified following Bessent's remarks during a CNBC interview on November 13, 2026, where he reiterated the urgency of the situation. He had previously confronted Lutnick about Megaspeed's status in a White House meeting just days earlier. As of now, Megaspeed remains unlisted on the Entity List, despite ongoing investigations into the company.
Megaspeed has been under scrutiny since at least 2025 for allegedly rerouting Nvidia chips to China, circumventing U.S. restrictions on high-specification models. The firm is suspected of handling over $4 billion worth of Nvidia chips within a two-year timeframe, leading Nvidia to place Megaspeed on its internal block list in June 2025.
The implications of this situation extend beyond corporate compliance, touching on broader U.S.-China tech competition. Advanced AI chips have become a focal point in this rivalry, with Washington employing export controls to limit China's access to powerful hardware. The lack of action on Megaspeed highlights enforcement challenges, particularly for companies based outside mainland China.
Updated 19:31 UTC
New Developments on Chip Export Controls
Commerce Secretary Howard Lutnick has agreed to testify before the Senate Banking Committee, responding to pressure from congressional Republicans and senior members of the Trump administration.
This testimony comes amid investigations into the Commerce Department’s enforcement of advanced-chip export controls, particularly concerning companies like Nvidia and Megaspeed International.
Lutnick's decision to testify voluntarily indicates an effort to address concerns about potential loopholes in export restrictions and delayed actions.
The investigation's focus on export controls involving Nvidia and Megaspeed International could have significant implications for U.S. trade policies.
Market reactions suggest a moderate decrease in the probability of Lutnick's imminent departure from his position as Secretary of Commerce.
Attention will be on Lutnick’s testimony and any potential revelations that could influence market perceptions about his future.
FAQ
What is the reason for Scott Bessent's criticism of the Commerce Department?
Scott Bessent criticized the Commerce Department for delaying the blacklisting of Megaspeed International, a company suspected of funneling advanced Nvidia AI chips to China, which raises national security concerns.
What is the Entity List and why is it significant in this context?
The Entity List is a trade restriction list maintained by the U.S. government that includes foreign entities deemed to pose a national security risk. Being added to this list would restrict Megaspeed's ability to conduct business with U.S. companies, particularly in high-tech sectors.
What has been the response from federal agencies regarding Megaspeed's status?
Four federal agencies have supported the move to add Megaspeed to the Entity List for months, indicating a consensus on the national security risks posed by the company.
What actions has Megaspeed allegedly taken that have raised concerns?
Megaspeed is suspected of rerouting over $4 billion worth of Nvidia AI chips to China, circumventing U.S. restrictions on high-specification models, which has led to scrutiny from U.S. authorities.
How does this situation reflect broader U.S.-China tech competition?
The controversy over Megaspeed highlights enforcement challenges in U.S. export controls aimed at limiting China's access to advanced technology, particularly in the context of the ongoing rivalry in AI and tech sectors.
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