What changed
U.S. Treasury Secretary Scott Bessent expressed doubts about Nvidia's internal controls during an interview with CNBC, questioning whether the company adequately verified its clients to prevent restricted AI GPUs from reaching China or other adversaries. Bessent emphasized that while U.S. export controls are in place, they cannot prevent all illicit sales, and the focus should be on ensuring that Nvidia's internal processes were robust enough to avoid such leaks.
What this means in practice
Bessent criticized Nvidia's general counsel, Timothy Teter, for contacting the U.S. Department of Commerce about the detention of Megaspeed's Alice Wong in Singapore. He suggested that Teter's actions may have been insufficient in overseeing potential violations. Bessent also noted that the Departments of the Treasury, War, and State, along with the Office of the U.S. Trade Representative (USTR), had supported adding Megaspeed to the Entity List for months, but the Department of Commerce's Bureau of Industry and Security (BIS) delayed the action.
Limitations and availability
Bessent did not speculate on potential consequences for Nvidia if executives were found to have knowledge of customers acting as intermediaries for Chinese entities. He expressed confidence that Nvidia's board of directors would conduct an investigation. However, the supplied announcement does not specify whether any formal actions or penalties have been taken against Nvidia or its executives.
