Scoop: Inside Bessent's Situation Room confrontation with Lutnick over China chip security
Executive tension emerged as Treasury Secretary Scott Bessent pressed Commerce Secretary Howard Lutnick about why Nvidia’s customer Megaspeed has not been added to the commerce entities list, despite accusations of diverting U.S. chips to China. The confrontation underscores growing scrutiny of agency actions as officials reportedly oppose measures that could escalate the China trade conflict. Multiple reports indicate efforts to blacklist Megaspeed have been slowed or reversed, with others warning that political considerations are shaping outcomes. The exchange signals heightened political risk for the administration’s china policy and suggests further investigations or decisions are likely forthcoming. The timeframe centers on the past year and recent days of internal discussion and public disclosures about Megaspeed.
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In a White House room, Bessent directly questioned Lutnick: 'How come Megaspeed isn't on the entities list?' The moment captures a high-profile clash over whether Megaspeed should face export controls.
Lutnick reportedly stammered at first before replying, 'I don't know. I'll look into it,' a response seen by sources as insufficient under mounting pressure to act on Megaspeed.
Megaspeed is accused of illegally diverting U.S. chips to China, a charge that has driven calls to place the company on the trade controls list and to pursue a blacklist.
Several reports have detailed internal pushback: Nvidia’s intervention is said to have influenced decisions, with some officials quietly resisting or delaying investigations.
New coverage notes that a May memo from National Security Adviser and Secretary of State Marco Rubio outlining problems with Megaspeed circulated among officials, yet action stalled or rolled back in subsequent weeks.
Public reporting from outlets like the New York Times and the Financial Times describes a pattern of delays and reversals within the Commerce Department, despite pressure from various government agencies to proceed with blacklisting.