Treasury Secretary Bessent Throws Lutnick’s Commerce Department Under The Bus As Nvidia’s China Scandal Grows: ‘Commerce Has The Pen’
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Treasury Secretary Scott Bessent used a CNBC appearance on November 13, 2026 to blame Commerce Secretary Howard Lutnick’s department for a months-long delay in blacklisting Megaspeed. The Singapore firm is central to the NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) China scandal. “Treasury, War, USTR and State were in favor of putting Megaspeed on the entity list for months,” he said. “But Commerce has the pen. And you will have to ask them about their internal processes.” AFP called it “a rare public rebuke of one cabinet department by another.”
As of 1:03 PM ET, Nvidia traded at $160.70, down 3.3% on the day. Jensen Huang has already resigned as CEO after acknowledging an extramarital affair, so Bessent’s comments do not explain the drop by themselves.
What Bessent Put on the Record, and What Stays Allegation
Bessent spoke in a TV interview. His X account published nothing on Nvidia, Megaspeed or Commerce. No agency has acted. The entity list is a trade blacklist kept by the Commerce Department’s Bureau of Industry and Security (BIS). Exports to anyone on it require a license, and Megaspeed has not been added.
The case against Megaspeed is still only an allegation. Per AFP, the firm “is suspected of helping Chinese firms get around US export controls by buying Nvidia chips for its data centers in Southeast Asia and routing them to China.” Reports disagree on how much it bought. AFP says it traded more than $4 billion in Nvidia chips over two years. Reuters, cited by Newsweek, places its purchases of advanced Nvidia AI chips at more than $4.8 billion since June 2024. Megaspeed says it “takes its compliance obligations under US export control laws extremely seriously” and has hired a U.S. law firm to review its compliance.
Bessent raised Nvidia’s role as a question: “The real story here should be: Did Nvidia know their client and was there a robust effort at Nvidia to make sure that there was no leakage and that they were selling to what were obviously pass through shell companies?” He added, “I am sure that the board, now having woken up to what’s going on, is going to do a thorough investigation.”
How Much Nvidia Revenue Rides on China
Very little. Nvidia’s guidance of $108.0B[1] in revenue for the third quarter of fiscal 2027 (the quarter ending in October 2026) excludes any Data Center compute revenue from China. In the second quarter, China Hopper shipments were less than 1%[1] of Data Center revenue. Nvidia has not disclosed the share of its revenue that Megaspeed accounts for. The real exposure is to compliance and governance. If investigators find that Nvidia ignored warning signs, the risk falls on a company with an $3.885 trillion market value and a CEO seat now open.
Washington Turns Up the Heat, and Commerce Pushes Back
The Senate Banking Committee has asked Huang to testify on Dec. 3 and Lutnick to appear on Dec. 10. Lutnick agreed. Commerce spokesperson Kristen Eichamer said he “has proactively agreed to appear voluntarily.” The committee said it is “prepared to use all tools at our disposal, including subpoenas” if either man does not appear voluntarily.
Commerce challenges the conflict story. A department spokesperson denied that a separately reported confrontation between Bessent and Lutnick at a White House meeting took place. A White House official said Trump “maintains complete confidence in the secretary.” Bessent declined to comment on reported tensions. His agency does not control the entity list.
Does the Cabinet Feud Change the Case for Owning Nvidia?
It changes the risk profile more than it changes earnings. The China revenue Nvidia guides to is already near zero. What matters now is what the board’s investigation finds about Nvidia’s sales to third-party buyers. Watch for three things: a Federal Register notice adding Megaspeed to the entity list, any 8-K filing disclosing the board’s findings, and Lutnick’s scheduled appearance on Dec. 10. If Commerce adds Megaspeed before that hearing, the move would follow Bessent’s public pressure. If it has not acted by then, expect the dispute between the two departments to dominate the hearing.
Contact [email protected] for any questions or corrections.
AJ spent 10 years writing about financial markets at The Motley Fool. His coverage centers on technology stocks and the broader macroeconomic trends, from interest rates to geopolitics, that shape where markets are headed next. AJ is drawn to the stories where big-picture economics and individual companies collide.
