Bessent Presses Lutnick on Megaspeed: Why It Isn't Blacklisted Yet
Treasury chief Scott Bessent confronted Commerce Secretary Howard Lutnick over why Megaspeed, accused of diverting US chips to China, is off the Entity List.
Image: Wikimedia Commons / Treasury Department
WASHINGTON, Nov. 11 — Treasury Secretary Scott Bessent confronted Commerce Secretary Howard Lutnick in the White House Situation Room last week over why Megaspeed, an Nvidia customer accused of diverting American chips to China, has not been placed on the Commerce Department's Entity List, according to a person briefed on the meeting.
Bessent put the question to Lutnick on Thursday, November 5, two days after the midterm elections. "How come Megaspeed isn't on the entities list?" Bessent asked, according to the person briefed on the meeting. Lutnick replied: "I don't know. I'll look into it."
- Bessent challenged Lutnick in the Situation Room on Nov. 5 over Megaspeed's absence from the Entity List; Lutnick said he would look into it.
- The Entity List has had no new additions in 13 months, and more than 100 candidates, including DeepSeek, await review.
- Lutnick received a classified memo in May, drafted under Secretary of State Marco Rubio, warning about Megaspeed and Alice Huang, a Megaspeed employee US officials believe is a Chinese asset.
- Three House Democrats wrote to Lutnick on Nov. 9 demanding written answers by Dec. 1.
Why Megaspeed Has Not Been Added to the Entity List
The Entity List is the Commerce Department's main tool for cutting companies off from American technology: a listed company needs a licence to buy US products, and those licences are usually refused. A listing would cut Megaspeed off from Nvidia's chips.
The list has not grown in 13 months; the last addition was Oct. 9, 2025, and more than 100 prospective additions have review-panel approval, including Chinese AI lab DeepSeek. Commerce Undersecretary Jeff Kessler was warned about Megaspeed several times, and an investigation into the company was halted after Nvidia intervened, according to people familiar with those decisions.
What the May Memo Told Lutnick About Megaspeed and Alice Huang
The memo was based on US surveillance of Alice Huang and an investigation into suspected chip smuggling by Megaspeed. Drafted under Secretary of State Marco Rubio, also national security adviser, it reached Lutnick in May.
Scrutiny intensified after it emerged that Nvidia chief executive Jensen Huang had an affair with Alice Huang. Nvidia's board has said the matter did not compromise national security, and its review cleared the chief executive of any security breach. Alice Huang has not been charged, and China denies the allegation.
How the Megaspeed Dispute Affects Nvidia and US Chip Export Rules
Nvidia has lost about $700 billion in market value in November as the scandal has widened. The sell-off came even as the broader market steadied; the Nasdaq rebounded on Wednesday as CoreWeave jumped 26 percent.
The case also exposes gaps in export controls. Northwestern Polytechnical University, on the Entity List since 2001 over its ties to the People's Liberation Army, bought two Nvidia H200 chips for 874,700 yuan, about $123,000, from an unlisted Chinese supplier. Congress is examining Nvidia's chip sales after reports that Huang was targeted by foreign intelligence.
The October 2025 trade truce with Beijing, announced by Bessent, suspended a rule extending blacklist restrictions to firms at least 50 percent owned by a listed company. It runs until January 10, 2027.
| Date | Who | What happened |
|---|---|---|
| May 2026 | Marco Rubio | Memo on Megaspeed reaches Lutnick |
| Nov. 5, 2026 | Bessent and Lutnick | Situation Room exchange over Megaspeed |
| Nov. 9, 2026 | Three House Democrats | Seek written answers from Lutnick by Dec. 1 |
Frequently Asked Questions
Why is Megaspeed not on the US Entity List?
Megaspeed has not been added to the Commerce Department's Entity List, which has had no new names in 13 months. Treasury Secretary Scott Bessent raised the omission with Commerce Secretary Howard Lutnick on Nov. 5, and Lutnick said he would look into it.
What is Megaspeed accused of doing with Nvidia chips?
Megaspeed is accused of illegally diverting American chips to China. The company denies it and says inspections by Nvidia, Malaysia's trade ministry and the Bureau of Industry and Security found no evidence of illegal transfers.
Who is Alice Huang and what is her link to Nvidia's CEO?
Alice Huang is a Megaspeed employee whom US officials believe is a Chinese intelligence asset. She had an affair with Nvidia chief executive Jensen Huang, and a classified memo on her reached Commerce Secretary Howard Lutnick in May.
What happens next in the Megaspeed investigation?
Three House Democrats have asked Lutnick to answer in writing by December 1 on what he and his officials knew. Lutnick has said only that he will look into it.
