Market news · Nov 11, 12:02 PM ET

Bessent Pressed Lutnick Over Why Nvidia Customer Megaspeed Is Not on Trade Blacklist

Treasury Secretary Scott Bessent reportedly confronted Commerce Secretary Howard Lutnick in a White House meeting over Megaspeed, a Singapore-based Nvidia customer accused of diverting chips to China. The dispute matters for US investors because it concerns whether the government will restrict a major Nvidia buyer, at a time when Nvidia shares have been volatile amid the Jensen Huang affair probe.

By Flash Finance US desk (written with AI assistance) · Editor: Kokila

The Treasury and Commerce secretaries have reportedly clashed over whether to restrict Megaspeed, a company at the center of a widening controversy involving Nvidia. The account comes mainly from people briefed on the matter, and the company's and government's full positions are still unclear.

The Situation Room exchange

According to Axios, the disagreement surfaced at a White House Situation Room meeting held after the midterm elections. Bessent asked why Megaspeed, an Nvidia customer accused of illegally diverting U.S. chips, was not on the entity list, according to a source briefed on the meeting. Lutnick reportedly struggled to answer at first and then said "I don't know." He told the group he would look into it, according to the report.

The Commerce Department maintains the Entity List, a trade blacklist that limits US companies from selling to listed firms. Sources told Axios that White House and intelligence officials have pressed Lutnick and his top advisers to act against Megaspeed since the fall of 2025.

Allegations against Megaspeed

One source with extensive experience in the chip matter told Axios that Lutnick had resisted action since receiving a memo on the company. The memo was drafted by Secretary of State and National Security Adviser Marco Rubio, and Lutnick received it in May, before a trip to China. Axios also reported that Lutnick spent the past year "undoing" other officials' efforts to hold the company accountable because he was worried about escalating the trade war with China, according to the sources.

Megaspeed has denied wrongdoing. It said inspections found no evidence of violations. Reporting from Bloomberg and others has described the firm as a large buyer of Nvidia hardware. Megaspeed and its Malaysian affiliate, Speedmatrix, purchased $4.8 billion of Nvidia's advanced artificial intelligence equipment and processors over the last three years.

Why Nvidia investors are watching

The dispute lands during a difficult stretch for Nvidia. Chief executive Jensen Huang said he had an extramarital affair, and the woman involved, Alice Huang, is a former Megaspeed executive whom intelligence agencies reportedly suspect of being a Chinese spy. Nvidia has seen hundreds of billions of dollars wiped from its value in recent days after the US chipmaker said it would investigate Huang's admitted relationship with the former Megaspeed director Alice Huang. On Tuesday, the stock rose roughly 5% after two straight days of declines.

Nvidia's board has opened an investigation. Separately, the DOJ is now conducting a criminal inquiry into Megaspeed. Nvidia has said its compliance audits found no evidence of export violations. Megaspeed remains an official Nvidia Cloud Partner, a designation Nvidia generally removes when it stops doing business with a company.

Reporting has also said that the Commerce Department stalled new additions to its Entity List for two months, despite pressure from the State, Energy, Treasury and Pentagon departments to restrict Megaspeed over suspected AI chip smuggling into China. Megaspeed remains off the Entity List.

What comes next

Analysts have not yet published a consensus view of how a restriction would affect Nvidia's sales, and the company's own response to the Situation Room report was not reported in the material available for this story.

NVDA stock page

NvidiaMegaspeedCommerce DepartmentTreasury DepartmentHoward LutnickScott Bessent

Sources

Written with AI assistance on Nov 11, 12:02 PM ET from the reports listed under Sources, and reviewed by our editor after publication. Before it was published, every figure was checked against those reports, and passages with figures that could not be found there were left out. It can still contain mistakes: read the sources before acting on anything. How we review. Not investment advice.