Scott Bessent and Howard Lutnick have been rivals longer than either has held a Cabinet post. During the presidential transition, both men pursued the same job.
Trump chose Bessent for Treasury and sent Lutnick to Commerce. Since then, they have clashed repeatedly over how hard to push back on China regarding advanced technology.
That disagreement had a specific address Nov. 11. Senior administration officials gathered inside the White House Situation Room in the days after the midterm elections. National security and export controls were on the agenda. Bessent came with a question that had not been answered through other channels.
He turned to Lutnick and asked, “How come Megaspeed isn’t on the entities list?” Lutnick struggled to respond, according to Axios, which cited sources briefed on the exchange.
He eventually said, “I don’t know. I’ll look into it.” A Commerce Department spokesperson called the account false. Neither response addressed why Megaspeed had not been blacklisted.
Megaspeed and the Commerce blacklist Bessent demanded
The Commerce Department’s Entity List is a federal blacklist. Companies placed on it cannot receive advanced American technology without a special export license, an approval almost never granted.
The list is used to cut off foreign governments, militaries, and intelligence services from hardware that could give them a strategic edge.
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Megaspeed is a company federal investigators accused of purchasing advanced Nvidia (NVDA) graphics processors and routing them to China in violation of export law. Those processors drive the global build-out of artificial intelligence systems.
The U.S. has restricted its exports for years. Some of that hardware has continued to reach Chinese buyers through intermediary companies, investigators say, and Megaspeed is one of the companies they have been examining.
National security officials from multiple agencies began pushing Commerce to add Megaspeed to the Entity List in fall 2025, according to sources cited by Axios. The State Department, the Defense Department, and the Energy Department all supported the blacklisting.
Those three agencies sit on the interagency committee that governs Entity List additions alongside Commerce. Commerce leads that committee. It is the agency that must act for a company to be added.
It did not act on Megaspeed.
The Megaspeed spy allegation and Jensen Huang’s exit from Nvidia
The case drew wider attention because of one Megaspeed employee. Alice Huang was identified by U.S. intelligence officials as a person of concern, suspected of working on behalf of China.
The allegation has not resulted in a public charge. It shifted Megaspeed from a standard export-enforcement matter to a counterintelligence concern, raising the pressure on Commerce to act.
The case grew more complicated on Nov. 12, when Jensen Huang resigned as Nvidia’s president and chief executive, effective immediately, according to an SEC filing.
Nvidia’s board had opened a formal investigation after Huang acknowledged an extramarital affair, with reports indicating the woman involved had been identified by U.S. authorities as a Chinese intelligence operative.
Colette Kress, the company’s longtime chief financial officer, was named interim CEO. Nvidia said it had no reason to believe company secrets were compromised.
Alice Huang and Jensen Huang share a surname. U.S. authorities have not confirmed a family relationship between them. No charge has been filed connecting Nvidia’s former CEO to the Megaspeed investigation.
Nvidia has not been accused of wrongdoing in the probe, and investigators have not publicly explained whether the two cases are related.
Lutnick built Cantor Fitzgerald into one of Wall Street’s leading fixed-income dealers before joining the administration.Anna Moneymaker / Getty Images
The year-long push on Megaspeed that Commerce refused to act on
The push to blacklist Megaspeed was not new when Bessent raised it in the Situation Room. Lutnick received an intelligence briefing on the company in May, before a trip to China.
Secretary of State Marco Rubio, who also serves as national security adviser, oversaw the briefing, according to sources cited by Axios. Lutnick was warned directly about Megaspeed’s alleged activities and made the trip without taking action.
Inside Commerce, the investigation stalled. Undersecretary Jeff Kessler, who oversees export enforcement, halted a formal probe into Megaspeed after Nvidia raised objections, sources told Axios.
Asked why the matter had stopped moving, Kessler said, “That’s a decision for the secretary.” Lutnick, sources say, was concerned that blacklisting a prominent Nvidia customer would damage the trade talks with Beijing that he had been managing.
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Bessent has pressed for tighter limits on China’s access to advanced chips. His position is that export restrictions are a tool of economic competition, not just a security measure.
Although the two men had clashed over that question in earlier deliberations, the Situation Room made it a formal confrontation.
Lutnick’s future at Commerce now in question
Senior White House officials have been discussing whether Lutnick should remain as Commerce Secretary, according to Seeking Alpha, citing a Reuters report and two people familiar with the matter.
The discussions were published Nov. 12. No decision has been made, and the conversations are described as preliminary.
Lutnick built Cantor Fitzgerald into one of Wall Street’s leading fixed-income dealers before joining the administration. His time at Commerce has included tariff negotiations, foreign investment decisions, and direct talks with Chinese officials.
Critics inside the administration cite Megaspeed as the clearest case of Commerce letting commercial relationships override security directives that State, Defense, and Energy had already backed.
Commerce has disputed every element of the Situation Room account. The White House has not commented on Lutnick’s status. Bessent’s office has not addressed the reporting.
More than a year after the first formal push to add Megaspeed to the Entity List, the company is not on it. No agency has said why.
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