U.S. Treasury backs export limits on Megaspeed as chip control scrutiny intensifies
Pressure is building in Washington to tighten oversight of advanced chip exports after questions emerged over how technology reached intermediary companies. Treasury Secretary Scott Bessent says his department has favored adding Singapore-based cloud computing firm Megaspeed to the U.S. entity list for months, while stressing the Commerce Department must make that decision.
Highlights
- Treasury's Office of Foreign Assets Control supports stricter enforcement on chip exports, emphasizing responsibility for export decisions lies with Commerce Department's Bureau of Industry and Security.
- Nvidia faces scrutiny over its due diligence after CEO Jensen Huang's departure and concerns about possible chip 'leakage' through pass-through shell companies involving Megaspeed.
- Political and regulatory pressure escalates following links of former Megaspeed executive Alice Huang to espionage, intensifying calls for tougher U.S. AI chip restrictions to China.
Administration pushes stricter chip enforcement
As reported by Reuters, Bessent told CNBC on Friday that Treasury's Office of Foreign Assets Control does not control export decisions and that any move to place Megaspeed on the entity list rests with the Commerce Department's Bureau of Industry and Security. He added that the Federal Trade Commission could also potentially pursue restrictive action.Bessent says the administration is working to shut down "leakage" in the chip export system. He also points to questions over how thoroughly Nvidia vetted its partner company after CEO Jensen Huang's departure this week, an event that sends shockwaves across the AI industry.
In remarks on CNBC's "Squawk Box," Bessent says the central issue is whether Nvidia knew its client and whether the company made a robust effort to ensure there was no leakage through what he describes as pass-through shell companies. He adds that anyone at the company found responsible should be held accountable.
Political and regulatory pressure expands
Megaspeed remains under scrutiny after reports linked former Megaspeed executive Alice Huang to a wider scandal, with U.S. authorities suspecting she is a Chinese spy. The controversy has intensified calls from U.S. lawmakers for tougher restrictions on China's access to advanced AI chips.The episode also raises pressure on the Trump administration, including Commerce Secretary Howard Lutnick, as questions grow over oversight of chip sales to China. When asked whether Congress needs to step in on export controls, Bessent says the government already has the authorities it needs and that those powers simply need to be implemented.
We have also analyzed White House scrutiny of Lutnick over China export controls and AI chip blacklist decisions.
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