The Commerce Department has delayed adding Megaspeed to its entity list, the trade blacklist used to restrict access to sensitive US technology.¹ The hold-up has become a flashpoint inside the administration because Megaspeed is accused of illegally diverting advanced American chips to China.

According to Axios, White House and intelligence officials had been pressing Commerce Secretary Howard Lutnick and his advisers to act against the company since the fall of 2025. The dispute sharpened after Lutnick received a May memo, drafted by Secretary of State and national security adviser Marco Rubio, laying out concerns about Megaspeed.²

The pressure mounted again on Tuesday, when the New York Times reported that Commerce Undersecretary Jeff Kessler had stopped an investigation into Megaspeed after Nvidia intervened, Axios said. Kessler had also been warned about the company in deputy-level meetings, but deferred the matter upward: “That’s a decision for the secretary.”²

Then, at a White House Situation Room meeting on Thursday after the midterm elections, Treasury Secretary Scott Bessent confronted Lutnick directly. “How come Megaspeed isn’t on the entities list?” Bessent asked, according to a source briefed on the meeting. Lutnick’s answer was: “I don’t know. I’ll look into it.”²

The clash exposes two competing priorities. Bessent, intelligence officials and others pressing for action see the alleged diversion as a national-security problem demanding a blacklist designation. Sources told Axios that Lutnick, by contrast, had spent the past year undoing efforts to hold Megaspeed accountable because of worries that a designation would intensify the trade war with China.²

Treasury and Commerce spokespeople could not immediately be reached for comment, Axios reported. The practical question now is whether Lutnick’s promise to “look into it” produces action—or extends a delay already drawing scrutiny.