Treasury Secretary Scott Bessent said on Friday that he was frustrated with the Commerce Department's delay in implementing controls over the export of certain Nvidia chips to China. Speaking on CNBC's Squawk Box, Bessent said the Treasury, Defense and State departments and the Office of the U.S. Trade Representative had all been in favor of adding Singapore-based Megaspeed International to the Entity List for months, but that Commerce "has the pen, and you will have to ask them about their internal processes." He added that he was frustrated because President Trump had made clear China should not receive any Nvidia chips above H100s.

The dispute comes against the backdrop of the resignation of Nvidia CEO Jensen Huang, who stepped down on Thursday after admitting to an affair with former Megaspeed executive Alice Huang, whom U.S. intelligence reportedly suspects to be a Chinese spy, according to The New York Times. Megaspeed, which prominently touts its partnership with Nvidia on its website, was accused last year of illicitly shipping advanced Nvidia chips into China, though it said in December there was "no evidence" of such exports. On Thursday it said it takes its obligations under American export control laws "extremely seriously" and was committed to working "constructively and transparently" with the U.S. government.S1S2

An Axios report said Bessent had asked Commerce Secretary Howard Lutnick in the White House Situation Room last week why he had resisted implementing export controls, particularly on Megaspeed, and that Lutnick had "repeatedly stood in the way" of crackdowns on firms suspected of diverting Nvidia chips to China. A Commerce Department spokeswoman told CNBC on Wednesday that the two had "no such conversation" in the Situation Room, while Bessent declined to discuss it, saying, "We don't repeat conversations in the Situation Room." Bessent said that "any leakage is very frustrating" because it hurts U.S. companies in the AI race and gives China an advantage.S2S3

Bessent also said he believed there was "a lot of leakage in the system" and argued the real question was whether Nvidia knew its clients and made a robust effort to prevent sales to what he called pass-through shell companies, adding that anyone at the company responsible should be held accountable. Background to the tension includes Trump's December announcement that Nvidia could sell its H200 chips to approved Chinese customers provided the U.S. receives a percentage of the sales, after Jensen Huang had pushed for eased export restrictions.S1S2

Congressional scrutiny is mounting. Senator Tim Scott, R-S.C., said Thursday that Huang and Lutnick have both been asked to testify before the Senate Banking Committee next month, and CBS News reports that Lutnick has agreed to testify on Dec. 10. GOP Senator Jim Banks of Indiana, a committee member, said the Commerce Department and Lutnick "appear[ed] to have used loopholes to allow some of these chip sales to occur" despite Trump's directive. Huang has separately been asked to sit for a closed-door briefing before multiple House committees. The Commerce Department did not immediately respond to requests for comment.S2S3