Bessent and Lutnick Clash Over Listing Nvidia Client Megaspeed as a Risk
Key Facts
U.S. Treasury Secretary Scott Bessent confronted Commerce Secretary Howard Lutnick over the failure to place Nvidia client Megaspeed on a list of companies posing national security concerns, according to sources cited by Axios. The discussion took place in the White House Situation Room on Thursday, after the midterm elections, the report said. Bessent asked Lutnick why the company had not been added to the Commerce Department’s Entity List, and Lutnick replied that he would look into it. The confrontation puts the department’s accountability for handling warnings about the company at the center of the dispute within the administration. It also highlights the sensitivity of the decision amid security concerns and the possibility of repercussions for trade tensions with Beijing.
Axios sources said White House and intelligence officials had been pressing Lutnick and his senior advisers to act against Megaspeed since fall 2025. The report added that the officials had been unable to get the department to act. It said Commerce Undersecretary Jeff Kessler received repeated warnings about the company during deputies’ meetings. The details place the dispute in the context of sustained pressure within the administration, rather than a one-off discussion about listing the company. Accountability centers on why the company remained off the list despite repeated warnings and pressure.
According to sources cited by Axios, Lutnick opposed action against Megaspeed because of concerns it could escalate the trade war with China. The case thus brings together the enforcement of national security controls and calculations about trade relations with Beijing. The U.S. Commerce Department said on January 13, 2026, that it would review applications to export Nvidia H200 chips to China on a case-by-case basis, if they met security conditions. Those conditions included requiring license applicants to show that the Chinese buyer had adopted compliance and customer-screening procedures, alongside independent verification of the chip’s performance and security. Kessler said at the time that export controls should evolve with technology while protecting national security. In February, Lutnick said Nvidia must comply with the licensing conditions imposed on H200 sales to China, which included a “know your customer” requirement to ensure the chips did not reach the Chinese military, Reuters reported.
The dispute coincided with Chinese trade data showing the trade surplus stood at $105.3 billion in October, compared with $133.5 billion in September, as imports rose, the Associated Press reported. Chinese exports increased 35.2% year over year in October, while imports rose 41.6%. In the first ten months of the year, the cumulative trade surplus reached $1.04 trillion. The value of China’s semiconductor exports also rose 137.1% in October from the same period a year earlier. The figures provide context on the growth of trade and chips in China as Washington debates restrictions on its access to technology. The trade data alone do not establish a connection between that growth and the Megaspeed case.
In trading, Nvidia shares closed at $168.89 on November 10, after ending the November 9 session at $178.67, according to EL7 data. The Associated Press reported on November 9 that the stock fell more than 4% in trading that Monday and had lost about 11% since the previous Wednesday amid reports of the investigations. Those moves are dated to sessions before Axios published its report on the Bessent-Lutnick confrontation. A regulatory filing cited by the Associated Press showed that H200 sales to China were limited and that the Chinese government was imposing restrictions on those sales. Nvidia said, in a statement cited by Reuters, that it receives updates from the U.S. government on parties and entities of concern and acts accordingly. The available closing data did not directly link the share-price movement to the White House meeting.
Nvidia is scheduled to hold a conference to discuss results for the third quarter of its fiscal 2027 on November 17, 2026. The quarter under discussion ended on October 25, 2026, according to the company’s investor relations announcement. The date puts the company’s next financial disclosure days after Axios’s report on the confrontation over Megaspeed. The conference is a scheduled opportunity to discuss quarterly performance, while the political issue centers on the Commerce Department’s decision on whether to place the company on the Entity List. Axios’s report did not specify a date for a subsequent decision on Megaspeed.