Treasury Secretary questions whether Nvidia knew its AI GPU customers

What the Treasury Secretary said

US Treasury Secretary Scott Bessent has questioned whether Nvidia knew it was selling restricted AI GPUs to shell companies acting for Chinese buyers. In an interview with CNBC, reported by Tom's Hardware, he said the focus should shift away from chief executive Jensen Huang's personal conduct and towards the company's internal controls.

Bessent asked whether Nvidia had made a robust effort to verify its customers and prevent leakage of restricted hardware. He said anyone at the company responsible should be held accountable, while stressing it was unclear whether Huang himself knew about the practices.

Export controls and their limits

Bessent admitted that US export controls, which ban sales of advanced AI GPUs to China, cannot stop all restricted hardware from reaching the country or other adversaries. According to Tom's Hardware, he suggested the country had obtained millions of restricted AI GPUs from Nvidia despite the rules.

He does not believe stricter export restrictions or extra powers for government agencies are needed. In his view, the authorities should simply enforce the existing regulations properly.

Criticism of Nvidia's general counsel

Bessent criticised Nvidia's general counsel, Timothy Teter, who reportedly contacted the US Department of Commerce to ask whether US authorities were behind the detention of Megaspeed's Alice Wong in Singapore. Bessent suggested the general counsel should have focused on oversight within the company rather than confronting government officials.

He declined to speculate about possible consequences for Nvidia if executives turned out to have known their customers were intermediaries for Chinese entities. He said he was confident the company's board would investigate the matter thoroughly.

Disagreement inside the administration

Bessent also revealed a split within the US government over how to handle Megaspeed, a company at the centre of the controversy. He said the Departments of the Treasury, War and State, along with the Office of the US Trade Representative, had supported adding Megaspeed to the Entity List, a trade blacklist, for months.

However, the power to impose such restrictions lies with the Department of Commerce's Bureau of Industry and Security. According to Tom's Hardware, that bureau stalled the blacklisting effort for months, reportedly because Commerce Secretary Howard Lutnick feared it could worsen trade tensions with China.

Why it matters

The comments put pressure on Nvidia over its customer checks at a time when Washington is trying to keep advanced AI hardware out of China. If a Treasury Secretary publicly doubts the company's internal controls, scrutiny of its sales practices is likely to intensify.

The episode also highlights friction between US agencies over trade policy, with enforcement of export rules caught up in broader negotiations with Beijing. Readers should note that the claims come from a single interview as reported by Tom's Hardware, and no formal findings against Nvidia have been confirmed.