Treasury Secretary Presses Commerce Department Over Megaspeed Chip Diversion
Treasury Secretary Scott Bessent confronted Commerce Secretary Howard Lutnick over the refusal to designate Megaspeed as a national security threat for diverting Nvidia chips to China.
US Treasury Secretary Scott Bessent confronted Commerce Secretary Howard Lutnick in the White House Situation Room last week over the Commerce Department's refusal to designate Megaspeed as a national security threat. Treasury officials argue that the Singapore-based company, formerly the Chinese video game developer 7Road International, circumvented US laws to channel more than $4 billion in advanced Nvidia semiconductors into China.
The dispute centers on the Commerce Department's decision to keep Megaspeed off the Entity List, a move Treasury officials believe is necessary to restrict access to US technology. The Commerce Department has declined the designation, potentially to avoid escalating trade tensions with China. Megaspeed has denied any wrongdoing, describing itself as a "compliant and legal company".
The controversy involves Alice Huang, the founder of Megaspeed International, whom the US intelligence community suspects of being a Chinese spy. Huang has since returned to Beijing, where her presence is known to security officials. The scandal has created significant pressure for Nvidia Corp. Chief Executive Officer Jensen Huang, whose position is reportedly threatened by the fallout of the chip diversion and spying allegations.
