Bessent Wanted Nvidia Client Megaspeed Blacklisted; Lutnick Did Not Act

Treasury Secretary Scott Bessent went on CNBC on November 13 and redirected a question about why Megaspeed is not on the Entity List to the Commerce Department. He said Treasury, the Pentagon, State and the US Trade Representative had backed a listing for months.

"But Commerce has the pen."

According to a letter from US senators, Megaspeed has bought more than $4.8B of Nvidia chips since June 2024. The company is suspected of routing chips to China through Southeast Asia; it says it takes its compliance obligations seriously.

Bessent Stated a Preference, Not a Decision

The verb tense matters. Bessent said agencies favored a listing, which is a statement of preference. Megaspeed is not on the list today, and no Federal Register notice exists.

He also told Congress that no new law is needed: "We have all the authorities that we need." The problem, in his account, is execution rather than authority.

A day earlier, Reuters reported that senior White House officials were discussing whether Commerce Secretary Howard Lutnick should be pushed out, citing two people familiar with the matter. A White House official said Trump maintains complete confidence in him.

The Committee Decides; Commerce Publishes

The fight in Washington is not about whether a restriction is warranted. It is about why an approved decision never took effect.

Entity List additions are decided by the End-User Review Committee. Commerce chairs it; State, Defense and Energy are members, and Treasury joins when appropriate. A majority vote is enough to add a company.

But the legal effect begins only when BIS, the Commerce bureau, publishes the decision. Reuters reported in June that the committee approved DeepSeek, memory maker CXMT and more than 100 other Chinese firms, and Commerce never published the list.

Bessent's criticism targets that second link. It is also the question Lutnick will face before the Senate on December 10.

What a Listing Stops, and What It Does Not

The rule text (15 CFR 744.11) is clear: if a listed company is party to a transaction, a license is required for every item subject to US controls. License exceptions cannot be used.

This is a sales rule. It does not recall chips already delivered to Megaspeed, and it does not track where they are used.

There is a second gap. The rule extending listings to affiliates that a listed company owns 50% or more of is suspended until January 10, 2027, under the truce with China. We covered that extension here. Fortune reports that Megaspeed has a Malaysian subsidiary called Speedmatric.

How Big Megaspeed Is for Nvidia

Placing the purchases against Nvidia's revenue scale shows what the stock price is actually carrying.

The main driver of the weekly drop was Huang's resignation on November 12. Direct sales to Megaspeed are too small to explain the loss. The price is carrying the chance that the 100-plus pending listings are eventually published, plus the leadership vacuum.

On Friday the selling spread across the sector. The Philadelphia Semiconductor Index fell between 3.4% and 4%, depending on the source; AMD lost 8.75% and Broadcom 4.76%.

The Nasdaq 100 fund over the same period frames how much of the decline stayed specific to Nvidia.

What It Means for Investors

• The market priced Huang's resignation; it has not yet priced the publication of 100-plus pending listings as a separate risk.
• If the list is published, the direct impact could fall on sales channels at Nvidia, AMD and companies like Super Micro that ship servers into Southeast Asia.
• The first date to watch is November 17: what Nvidia says on the call about non-China Asian sales will show this channel's size (how to read earnings day).
• The risk to this view: if Lutnick stays and the White House chooses not to escalate with China, the list may stay unpublished.

This article draws on Reuters reports from November 12 and 13, a Fortune report from November 13 and the current text of 15 CFR Part 744. Megaspeed's purchase total is from a senators' letter as reported by Reuters. Market data come from Reuters and StockTitan closing reports. The semiconductor index decline is given as a range because sources differ. The revenue guidance figure is as reported by 24/7 Wall St.