Treasury Secretary Scott Bessent says the central question in the Nvidia chip-smuggling story is whether the company knew who its customers were, not what Jensen Huang did or did not know.
In an interview, Bessent conceded that U.S. export controls, which bar sales of advanced AI chips to China, leak. China allegedly obtained millions of restricted Nvidia GPUs. He said coverage had dwelt on Huang's "personal foibles" when it should ask whether Nvidia made a robust effort to avoid selling to "obviously pass-through shell companies", meaning firms that exist mainly to hand goods to someone else. "We do not know for a fact that Jensen Huang knew this," he said, but if it happened, the company's controls were not robust.
He singled out Nvidia general counsel Timothy Teter, who reportedly contacted the Department of Commerce to ask whether U.S. authorities were behind the detention of Megaspeed's Alice Wong in Singapore. Bessent said Teter should have done more oversight instead. He declined to speculate on consequences for executives and said he expects Nvidia's board to investigate.
The second revelation points inward. Bessent said the Treasury, War and State Departments and the U.S. Trade Representative's office had backed putting Megaspeed on the Entity List, a trade blacklist that restricts exports to named companies, for months. That decision belongs to Commerce's Bureau of Industry and Security, which reportedly stalled because Commerce Secretary Howard Lutnick feared worsening trade tensions with China.
Bessent does not want new restrictions or extra powers for agencies. He wants the current rules enforced. That treats the problem as a know-your-customer failure, the same standard banks face on money laundering, and it puts Nvidia on the hook for diligence. It also sits awkwardly beside his own account, in which the agency that enforces the rules is the one that held back on Megaspeed. If enforcement is the fix, the open question is who pushes Commerce.