US Treasury Secretary Scott Bessent on Friday blamed the Commerce Department for failing to blacklist Megaspeed, the Singapore company at the center of a scandal that prompted Nvidia chief executive Jensen Huang to resign.
Speaking on CNBC, Bessent said Treasury, the Defense Department, the US Trade Representative's office and the State Department had backed adding Megaspeed to the Washington's trade blacklist, "for months."
"But Commerce has the pen," Bessent said. "You will have to ask them about their internal processes."
He said he was "frustrated" because President Donald Trump "made it very clear that China should not receive any Nvidia chips above H100s."
"Any leakage is very frustrating because it hurts our great companies, and in the AI race gives the Chinese an advantage," he said.
The remarks are a rare public rebuke of one cabinet department by another. Commerce is led by Secretary Howard Lutnick.
Megaspeed is suspected of helping Chinese firms get around US export controls by buying Nvidia chips for its data centers in Southeast Asia and routing them to China.
The company reportedly traded more than $4 billion worth of Nvidia chips over two years.
Its former director Alice Huang was this week identified in US media as an alleged Chinese intelligence asset who had a relationship with Jensen Huang. The two are not related. Beijing has denied the spying allegations.
Jensen Huang acknowledged an extramarital affair in a November 8 letter to Nvidia employees that did not name the woman involved and resigned his position on Thursday.
Nvidia's board has said it will investigate, and three US Congress committee chairs have asked him to attend a closed-door briefing on November 18.
Bessent said coverage of the affair had focused too much on Huang's private life.
"The story thus far has been on Jensen Huang’s personal foibles," he said. "The real story here should be: Did Nvidia know their client, and was there a robust effort at Nvidia to make sure that there was no leakage."
He questioned whether Nvidia had been selling to "what were obviously pass-through shell companies."
"I think it's important that anyone at the company there be held accountable for that," Bessent said.
He said there was "a lot of leakage in the system" and that the administration was "constantly working to close that down."