Bloomberg Television7 min
Bessent, Lutnick Clash Over Nvidia China Curbs
Bessent, Lutnick, Maria Curi, David Gura, Christina Ruffini
Interview, Fireside Chat
- Treasury Secretary Scott Besson confirmed to Commerce Secretary Howard Lutnick that the administration has possessed intelligence since at least May regarding Megaspeed (Alice Wong's company) and potential ties to Chinese espionage, yet the company remains off the restricted entity list.
- Besson's direct inquiry to Lutnick about the omission of Megaspeed signaled to senior officials that Lutnick lacked sufficient knowledge of a company central to suspected illegal technology rerouting by NVIDIA CEO Jensen Huang's associate, Alice Wong.
- Commerce Department officials, led by Undersecretary Jeff Kessler, have failed to place Megaspeed on the entity list despite months of intelligence indicating that Huang's partner, Alice Huang, is a suspected spy and that sensitive U.S. chips were being illegally diverted to China.
- Despite a reported affair between Jensen Huang and Alice Huang and ongoing lobbying efforts, Megaspeed has not been restricted from receiving U.S. technology exports like the H200 chips, which Huang sought to keep accessible to the Chinese market to ensure U.S. adversary reliance.
- Jensen Huang cultivated close relationships with key decision-makers, including publicly declaring Commerce Secretary Howard Lutnick as his primary administrative contact and making direct phone calls to President Trump to advocate for open Chinese market access.
- A clear policy disagreement exists within the Trump administration: Treasury Secretary Besson, Senator Marco Rubio, and officials including Besant, Greer, and Hegseth support imposing immediate controls on Megaspeed, while Lutnick has been characterized as a "lone holdout" slow-walking action.
- Lutnick cites a desire to maintain good U.S.-China relations and avoid disrupting the broader trade war as reasons for his resistance to immediate restrictions, a stance confirmed by Besson's admission of the internal split despite Commerce Department denials of specific reporting.
- Intelligence memos detailing the Megaspeed risks were drafted under State Secretary Marco Rubio in May, personally handed to President Trump by Rubio aboard Air Force One, and subsequently shared with high-level officials, yet no action was taken by the Commerce Department to date.
- The Commerce Department has initiated limited countermeasures, specifically a process to stop remote access to technology, but Besson and reporters indicate these steps are insufficient to prevent the flow of sensitive tech to China.
- While current scrutiny focuses on Jensen Huang and Commerce officials Lutnick and Kessler, forward-looking analysis suggests that when Democrats regain control of Congress next year, accountability and investigations will likely escalate to include President Trump.
- Internal friction over the Megaspeed case highlights divergent goals among administration officials, with some arguing that bureaucratic inertia and conflicting policy priorities regarding China have potentially compromised U.S. national security.