Treasury Secretary Scott Bessent questioned Commerce Secretary Howard Lutnick on November 5 regarding the status of Megaspeed, an Nvidia customer suspected of smuggling US chips to China. Despite allegations, the firm remains off the US Entity List, which restricts access to American technology. Lutnick stated he was unaware of the situation, noting that his department has not added any new entities to the blacklist in 13 months.
The last addition to the Entity List occurred on October 9, 2025. According to reports, over 100 companies, including the Chinese AI laboratory DeepSeek, have been approved for blacklisting by a review panel but remain unpublished by the Commerce Department. Senator Tom Cotton previously alerted Lutnick to Megaspeed in October 2025, claiming its chip orders represented nearly 2% of a US company's global data center sales.
Bessent previously brokered an October 2025 trade truce with Beijing, which suspended rules that would have applied blacklist restrictions to companies at least 50% owned by listed firms. This truce is scheduled to expire on January 10, 2027. On November 5, the Commerce Department extended the freeze on these export rules until that same date, while Nvidia shares saw a 2.7% increase to $173.29 ahead of earnings.
Megaspeed denies any illegal chip transfers, and Nvidia's board maintains that the CEO's involvement in a scandal did not impact national security. Former Commerce official Kevin Kurland noted that current trade policy is currently limiting the application of national security tools. The Commerce Department maintains that it continues to utilize the blacklist against bad actors and closed an AI chip export loophole in May.
