A growing controversy surrounding Nvidia’s advanced artificial intelligence chips has exposed fresh divisions within President Donald Trump’s administration, with Treasury Secretary Scott Bessent publicly directing attention toward the Commerce Department as questions mount over Commerce Secretary Howard Lutnick’s handling of sensitive technology exports to China.

The dispute has intensified following allegations that advanced American AI chips were diverted to China through a Singapore-based technology company known as Megaspeed. The company has come under scrutiny over concerns that it may have been involved in illegally redirecting restricted American technology.

Speaking during a Friday interview with CNBC, Bessent indicated that several major government departments had supported placing Megaspeed on the government’s Entity List, a designation that can restrict companies from accessing certain American technologies.

However, he suggested that the Commerce Department had failed to complete the necessary action.

“Treasury, War, USTR, and State — they were in favor of putting Megaspeed on the Entity List for months, but Commerce has the pen,” Bessent said.

His comments have placed additional pressure on Lutnick, whose department is responsible for overseeing important American technology export restrictions.

Tensions Between Bessent and Lutnick Intensify

According to reports, Bessent previously confronted Lutnick during a White House meeting, questioning why Megaspeed had not been added to the Entity List despite concerns raised by other administration officials.

The disagreement reportedly reflects broader frustrations within the administration over how the United States should respond to suspected attempts to divert advanced American semiconductor technology to China.

Bessent has emphasized that President Trump previously expressed concerns about allowing China access to certain advanced Nvidia chips.

He argued that unauthorized transfers could undermine American companies competing in the global artificial intelligence industry while potentially giving China access to valuable technology.

The Commerce Department has not immediately provided a detailed public response to Bessent’s latest remarks.

Trump Advisers Reportedly Discuss Lutnick’s Future

Meanwhile, the controversy has reportedly reached the highest levels of the White House.

According to people familiar with the discussions cited in media reports, some Trump advisers have begun considering whether Lutnick should remain in his position.

The reported conversations come amid increasing scrutiny of the administration’s handling of semiconductor exports and questions about why certain companies identified as potential national security concerns have not faced stronger restrictions.

However, discussions about a possible departure do not mean a final decision has been made.

The White House has previously defended Lutnick, stating that Trump maintains complete confidence in the Commerce Secretary and his ability to carry out his responsibilities.

That public show of support suggests that Lutnick’s position remains uncertain despite the growing criticism.

Nvidia Controversy Raises Broader National Security Questions

The controversy has also drawn attention to Nvidia and its former chief executive, Jensen Huang, following reports surrounding his personal relationships and the company’s connections to individuals associated with Megaspeed.

Separate allegations involving Alice Huang, a Megaspeed executive whom American authorities reportedly suspect of having connections to Chinese intelligence, have added another dimension to the investigation.

These allegations remain serious matters requiring careful examination, and the individuals involved should not be treated as guilty without established evidence.

The wider issue, however, extends beyond individual relationships. It raises questions about America’s ability to protect sensitive semiconductor technology while maintaining its competitive position in the global AI industry.

What Happens Next?

With Bessent’s public comments increasing pressure on the Commerce Department, attention is now turning toward President Trump and whether he will demand further explanations from Lutnick.

Congressional scrutiny is also expected to intensify as lawmakers seek answers about export approvals, potential loopholes and the government’s response to companies suspected of redirecting American technology.

For now, Trump has publicly maintained confidence in his Commerce Secretary, while reports of internal discussions about Lutnick’s future continue to circulate.

Whether the controversy results in significant changes within the administration remains uncertain.

One thing is clear: the dispute has exposed disagreements over America’s semiconductor export policy, national security priorities and the responsibilities of officials overseeing some of the country’s most strategically important technologies.