U.S. Treasury and Commerce Secretaries Clash at White House Over Nvidia Sanctions

[Financial News correspondent Lee Byeong-cheol in New York]  Allegations that Nvidia CEO Jensen Huang was involved with a Chinese spy are fueling divisions within the Trump administration. The U.S. Treasury and Commerce secretaries reportedly clashed at the White House over sanctions against Megaspeed, a major Nvidia customer. The fallout has intensified amid reports that the Commerce Department knew for months about the relationship between CEO Huang and a person suspected of being a Chinese spy, yet took no export-control action against the company.
According to CNN on the 11th (local time), Treasury Secretary Scott Bessent questioned Commerce Secretary Howard Lutnick last week in the White House Situation Room about why Singapore-based Megaspeed had not been designated a national security threat. CNN cited two people familiar with the matter. The clash between the two secretaries was first reported by the online news outlet Axios.
Megaspeed has been a major purchaser of Nvidia's advanced artificial intelligence (AI) chips. There have long been concerns within the Trump administration that the company may have circumvented U.S. export-control regulations to supply advanced chips to China.
Treasury Department officials argued that, based on these suspicions, Megaspeed should be added to the Commerce Department's list of entities subject to export controls, the Entity List. Inclusion on the list strictly limits U.S. companies' exports of products to the listed entity.
CNN reported that the Commerce Department has so far refused to add Megaspeed to the list. Bessent raised the issue directly in the White House Situation Room on the 5th, but Lutnick reportedly made no commitment to take specific action.
It has also emerged that senior Trump administration officials, including Lutnick, had been briefed several months ago about the relationship between CEO Huang and Alice Huang. Alice Huang is an executive at Megaspeed, and U.S. intelligence agencies have reportedly suspected that she may be linked to Chinese intelligence agencies.
In an email to employees on the 8th, CEO Huang acknowledged and apologized for having an extramarital relationship with Alice Huang. Nvidia's board has launched an independent investigation to assess, among other things, the possibility of access by foreign intelligence agencies.
Megaspeed was founded in 2015 as a Chinese game developer under the name Sevenroad International. After Alice Huang became a director and the company changed its name, it grew into one of Asia's largest purchasers of Nvidia chips. Some analysts estimate that Megaspeed's purchases of Nvidia chips exceed $4 billion.
Megaspeed has categorically denied allegations of illegal activity. The company said it is “a legitimate business that complies with regulations.” China's Foreign Ministry also rejected the allegations that Alice Huang was a spy, calling them “baseless speculation and an attempt to defame and smear China.”
Some interpret the Commerce Department's stance as reluctance to impose further sanctions as President Trump seeks to manage trade relations with China. According to CNN, the department has not added any new companies to the Entity List for more than a year.
It remains unclear, however, whether the Commerce Department delayed sanctions in consideration of U.S.-China relations or Nvidia's business interests. The Treasury and Commerce departments did not immediately respond to CNN's requests for comment.


[email protected] Correspondent Lee Byeong-cheol Reporter