Nvidia scandal exposes cracks in Trump admin as Bessent blames Lutnick over Megaspeed blacklist delay

The Nvidia scandal has reached the White House with US Treasury Secretary Scott Bessent having targeted Commerce Secretary Howard Lutnick on Fri (Nov 13). Bessent slammed Lutnick over its failure to blacklist Megaspeed, the Singapore-based company at the centre. He also said that the Treasury Department, Pentagon, US Trade Representative's office and State Department had supported putting Megaspeed on Washington's trade blacklist “for months.” But despite that backing, the decision was never made. "But Commerce has the pen. You will have to ask them about their internal processes," Bessent told CNBC.

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Lutnick has been called to testify before Congress. This comes after it was reported that Lutnick might have known about Nvidia CEO Jensen Huang's connection with the alleged Chinese spy. Lawmakers have called on the commerce secretary to detail what the Trump administration knew about Huang's alleged affair with Alice Huang, an alleged Chinese businesswoman and former Megaspeed director. The doubt around Lutnick's role comes as several of his decisions have favoured China, according to reports.

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Did Lutnick's decision favour China?

Lutnick's relationship with Huang has come under scrutiny, particularly after an old video resurfaced in which Huang described Lutnick as the person he spoke to most in the administration. Then comes his several decisions that are now being seen as pro-China. Under Lutnick, the Trump administration delayed adding DeepSeek, China's AI startup, CXMT, a memory chipmaker, and more than 100 other companies flagged as national security risks to the US trade blacklist. Lutnick allegedly stalled Trump's crackdown on companies suspected of diverting Nvidia's AI chips to China. Lawmakers also accused Lutnick and Under Secretary Jeffrey Kessler of failing to close loopholes that could allow advanced American technology to reach China.

Moreover, under the watch of Lutnick, the administration approved sales of Nvidia's H200 AI chips to Chinese companies in December 2025 in exchange for a share of export sales, a decision questioned by lawmakers. US lawmakers alleged that some Chinese companies receiving approval for advanced AI chips had concerning links to the Chinese government, military and sanctioned entities. During a meeting with senior administration officials, Lutnick reportedly said he would have to "talk to the president" when confronted about his reluctance to implement export controls.