U.S. Treasury Secretary Scott Bessent on Sunday questioned whether Nvidia's earnings may have been inflated by inappropriate sales to China and urged the chip maker to hire an outsider as its next chief executive. In a Fox News appearance, Bessent said Nvidia owes the market an explanation amid allegations that former CEO Jensen Huang had an affair with a Chinese spy and oversaw sanctions-evading chip sales to Asian companies.

Bessent asked whether the company's culture had pushed illicit sales to boost revenue and earnings, saying, "I think we need answers in the next 10 days from the board and from the outside counsel." He also said it was "obvious" that some companies doing business with Nvidia were shell companies for Chinese interests, accusing the chipmaker of a "culture of noncompliance." "This makes me think that as the board conducts the search for a new leader, that they need to go outside the company," he said.S2

The scandal has weighed heavily on Nvidia, which is central to the AI economy that has been key to U.S. economic growth. Since the matter broke open in late October, Nvidia shares have shed more than $1.8 trillion in market capitalization, a decline that Axios reported could affect millions of Americans. Nvidia did not immediately respond to a request for comment on Bessent's remarks.S2

Bessent's comments also touched on the Commerce Department, which he said has questions to answer about why it did not impose tighter controls on Nvidia's exports. Administration officials have accused Commerce Secretary Howard Lutnick of stalling curbs on those exports. Huang has long been a favorite of President Trump and other administration figures, though Bessent has not been as effusive about him as others.S2

Nvidia is due to report quarterly results on Tuesday, its first significant public comments since Huang resigned and CFO Collette Kress took over as acting CEO.S2