US Treasury Secretary Demands Nvidia Explanations Over Potential China Chip Smuggling

US Treasury Secretary Scott Bessent has demanded that Nvidia explain if the company knowingly ignored chip smuggling to China. The US Treasury has requested formal answers from the Nvidia board of directors and the results of an internal investigation within 10 days. This demand follows allegations that advanced artificial intelligence chips are being diverted to China despite existing United States export restrictions.

Investigation into chip diversion

The US government prohibits the export of advanced AI chips to China to protect national security. While President Donald Trump authorized the sale of H200 high-end chips from a previous generation to China in late 2025, the administration has prohibited the sale of any chips higher than that generation. US officials suspect that Megaspeed, a client based in Singapore, has been transferring chips to China.

The investigation involves scrutiny of regional sales data and specific individuals. US officials suspect Alice Huang, a former executive at Megaspeed, of being a Chinese spy. Data from 2024 shows that Singapore accounted for more than 20% of the global sales for Nvidia. However, Scott Bessent claims that only 1% of the chips sold to Singapore actually remained in the country.

Scott Bessent stated that Nvidia must explain if the company had a culture of compliance regarding US export restrictions. The Treasury Secretary suggested that Nvidia requires a drastic restructuring to address these concerns. Scott Bessent further suggested that the company should seek its next CEO from outside the organization rather than from within the current leadership structure.

Leadership changes at Nvidia

The demand for explanations arrives during a period of significant leadership transition at Nvidia. Co-founder and CEO Jensen Huang resigned from his position three days prior to November 16, 2026. Jensen Huang had served as the co-founder and CEO of the company since 1993.

The Nvidia board of directors appointed Colette Kress as interim CEO last week. According to reports from El Espectador, Colette Kress is scheduled to lead the presentation of quarterly results on Tuesday. The company faces intense pressure to resolve the questions raised by the US Treasury regarding its international supply chain and its adherence to national security protocols.

Glossary

• H200 — The H200 is a high-end chip from a previous generation. These products are sold by Nvidia.
• export restrictions — These are existing United States regulations that prohibit the export of advanced AI chips to China to protect national security.
• interim CEO — This is a temporary leader appointed to manage a company during a leadership transition.
• quarterly results — These are financial or performance presentations scheduled by a company's leadership.