Bessent and Lutnick Clash Over Megaspeed’s Placement on US Entity List
Key Facts
US Treasury Secretary Scott Bessent confronted Commerce Secretary Howard Lutnick over the failure to place Megaspeed, an Nvidia customer, on the Commerce Department’s Entity List, Axios reported, citing people familiar with the matter. The confrontation took place during a meeting in the White House Situation Room on the Thursday after the midterm elections. Bessent asked Lutnick why the company was absent from the list, according to the report. Axios quoted Bessent as saying: "Why isn't Megaspeed on the Entity List?" Lutnick replied: "I don't know. I'll look into it." The exchange put the listing decision and the department’s responsibility for handling warnings at the center of the dispute over the company.
Axios sources said White House and intelligence officials had pressed Lutnick and his senior advisers to act against Megaspeed since fall 2025, but had not succeeded in getting the department to take action. The outlet added that Commerce Undersecretary Jeff Kessler received repeated warnings about the company during deputies’ meetings. Kessler referred the listing decision to the secretary, saying, "That's a decision for the secretary," according to the report. The details show that the listing issue was raised repeatedly in department meetings, alongside the confrontation between Bessent and Lutnick. The sources also link the delay to concerns about the impact of action on trade relations with China.
According to Axios, Lutnick resisted action against Megaspeed for fear it could escalate the trade war with China. The company faces allegations of illegally diverting US chips to China, the report said. In a separate development related to export policy, the Commerce Department’s Bureau of Industry and Security said on January 13, 2026, that it would review export applications for Nvidia H200, AMD MI325X and similar chips to China on a case-by-case basis, subject to security requirements. The policy requires license applicants to show that available capacity for US customers would not be reduced. It also requires compliance procedures and customer screening by the Chinese buyer, as well as independent testing of the product in the United States to verify its performance and security. Undersecretary of Commerce for Industry and Security Jeffrey Kessler said, "Export controls should evolve as technology changes, while protecting national security."
Axios said a memo prepared by Secretary of State Marco Rubio outlined problems involving Megaspeed, and that Lutnick was among the officials who received the report in May 2026 before a trip to China. In a separate statement reported by Reuters, Nvidia said it had contacted the US government and conducted its own investigation, finding no reason to believe its products had been diverted to unauthorized destinations. Megaspeed was founded in 2015 as 7Road International, according to trade filings cited by Reuters. The company changed its name to Megaspeed International in March 2023. The filings showed its assets rose to $3 billion in 2024 from $33 million in 2023, while revenue reached $294 million after being zero the previous year. The figures provide background on the company at the center of the dispute over chip export controls.
The Associated Press reported that the Commerce Department investigation was referred to the Justice Department, whose National Security Division is investigating whether Megaspeed violated export-control laws, as part of an inquiry that also includes Alice Huang. Nvidia’s board said it had no reason to believe national security or company secrets had been compromised, and that Chief Executive Jensen Huang would continue to lead the company and cooperate with the investigation. In response to a request for comment, Nvidia said Huang speaks with "thousands of senior customer executives every year" and that cloud-service customers in Asia receive ordinary business information, not sensitive company secrets, Reuters reported. Singapore’s Ministry of Home Affairs said the government and its officials had not investigated Alice Huang, while confirming that investigations into Megaspeed were ongoing. These positions keep the investigation and export-control oversight at the center of the case, alongside the dispute within the US administration over listing the company.
EL7 data showed Nvidia shares closed at $168.89 on November 10, compared with a close of $178.67 on November 9. These were closing prices for sessions before Axios published its report on the White House confrontation, and the data do not identify the reason for the price change. The company is due to discuss results for the third quarter of its 2027 fiscal year on a call scheduled for November 17 at 2 p.m. Pacific time. The fiscal quarter ended on October 25, 2026, according to an investor-relations announcement. The date comes days after Axios published its report and provides a scheduled opportunity to discuss the company’s results. The report did not specify a date for a subsequent Commerce Department decision on listing Megaspeed.