US Treasury Secretary Bessent Calls for Stricter Chip Export Controls Amid Nvidia Leadership Crisis

In a recent high-profile interview with CNBC, United States Treasury Secretary Bessent shed light on the intensifying efforts of the U.S. government to fortify its technological perimeter against foreign intelligence operations and illegal trade. The primary focus of his remarks was the case of Megaspeed, a firm registered in Singapore, which the Treasury Department has been advocating to place on a trade blacklist for several months. However, Bessent clarified the bureaucratic boundaries of this process, noting that while the Treasury provides critical intelligence and support, the final authority to add a company to the Entity List resides with the Department of Commerce.

According to Bessent, the Office of Foreign Assets Control (OFAC) within the Treasury does not possess the legal mandate to handle export control matters directly. Instead, these decisions must be executed by the Bureau of Industry and Security (BIS) under the Commerce Department. Despite this jurisdictional divide, Bessent emphasized that a unified front has emerged within the administration. For months, the Treasury, the U.S. Trade Representative (USTR), and the State Department have all signaled their support for the blacklisting of Megaspeed, urging the Commerce Department to take decisive action. Furthermore, he suggested that the Federal Trade Commission (FTC) might also implement additional restrictive measures to ensure the firm is isolated from U.S. markets.

This regulatory push is inextricably linked to a broader scandal that has sent shockwaves through the artificial intelligence industry. Recent reports have alleged a clandestine relationship between former Nvidia CEO Jensen Huang and Alice Huang, the former chairperson and CEO of Megaspeed. The situation escalated significantly when it was revealed that Alice Huang is suspected by U.S. authorities of acting as a Chinese spy. This revelation, coupled with reports that Alice Huang had been banned from entering Singapore in February after providing false information, has cast a shadow over Nvidia’s internal governance. The resulting turmoil led to Jensen Huang’s departure from the company, a move that has destabilized the AI sector and prompted calls from members of Congress for an immediate tightening of AI chip distribution channels.

Bessent argued that the Megaspeed incident serves as a cautionary tale for the entire tech industry. He pointed out that the real concern lies in whether industry giants like Nvidia have implemented sufficient "Know Your Customer" (KYC) protocols. The Treasury Secretary questioned whether the company had taken rigorous enough measures to ensure that their cutting-edge hardware was not being diverted to shell companies acting as conduits for prohibited entities. He asserted that any personnel within the corporate structure who neglected these safeguards should be held personally accountable for the security breach.

As the Trump administration seeks to plug the systemic gaps in the advanced chip export framework, Bessent dismissed the notion that new legislation is required from Congress. When questioned on whether the legislative branch needs to intervene to strengthen export laws, Bessent maintained that the current legal framework provides the administration with all the necessary powers. He argued that the missing link is not the law itself, but the rigorous and consistent execution of those laws. By focusing on enforcement and corporate liability, the administration aims to prevent the strategic leakage of AI technology that could fundamentally alter the global balance of power.