Conflict breaks out in Trump's cabinet over Huida incident, Bessant reportedly asks Lutnick why he is not under control

U.S. Treasury Secretary Bessent questioned Commerce Secretary Lutnick about his handling of Singapore data center company Megaspeed, asking the Commerce Department to explain why the United States has not banned the sale of advanced AI chips to the company, which is at the center of Huida's recent involvement in the Chinese espionage case.

The New York Times reported that people familiar with the matter said the conversation highlighted growing tensions within the Trump administration over AI policy and the Department of Commerce’s attitude toward Huida. Debate within the U.S. government intensified after Huida CEO Jen-Hsun Huang admitted to having an extramarital affair with a former Megaspeed executive. According to reports, U.S. intelligence agencies have confirmed that the woman named Huang Le is a Chinese citizen and works for the Chinese Ministry of State Security.

Lutnick responded to Bessant by saying the Commerce Department could now move quickly to impose restrictions on Megaspeed, people familiar with the matter said. Neither the Ministry of Commerce nor the Ministry of Finance responded to the report.

Since the end of 2022, the United States has imposed restrictions on the direct sale of advanced chips to China. But companies like Megaspeed are circumventing these regulations by building data centers in Southeast Asia to meet the needs of Chinese customers. U.S. officials have also been investigating whether Megaspeed may have illegally transferred the chips to China, an accusation that Megaspeed continues to deny.

Debate over how to regulate U.S. technology has intensified in recent months, with growing differences between other departments and Commerce Department officials who regulate technology export regulations. One of the Commerce Department’s most powerful measures is the Entity List, a trade blacklist. U.S. companies are not allowed to export products to any company on the Entity List without government permission.