print-icon
print-icon
Add ZeroHedge as a preferred source on Google

"These Shell Companies Were Obvious": Bessent Gives Nvidia Board 10 Days, Wants Outsider To Replace Huang

Tyler Durden's Photo
by Tyler Durden
Authored...

Treasury Secretary Scott Bessent says Nvidia needs a "dramatic shakeup" at the top and should look outside the company for Jensen Huang's successor, and he isn't letting the ouster close the books on how the company's chips reached China. (We lay the entire backchannel infrastructure out here... worth a read.)

U.S. Secretary of the Treasury Scott Bessent speaks during a press conference in St. Cloud, Minn. on Friday, Oct. 30, 2026.Leila Navidi | Star Tribune | Getty Images

"This makes me think that as the board conducts a search for a new leader, that they need to go outside the company," Bessent said on Fox News on Sunday, adding that given what was going on inside the chipmaker, "they need a dramatic shakeup."

Asked by Larry Kudlow why Megaspeed, the Singapore firm tied to the alleged Chinese spy at the center of the scandal, never made the Commerce Department's entity list, Bessent left Commerce's "internal workings" to Commerce and turned on Nvidia instead: "Was it a low-level fail? Was it in the middle? Or was it up in the C-suite? And who knew?"

"Because, I mean, these [shell] companies were obvious. They were being investigated," he said. "And did Nvidia use them as a workaround to sell chips to the Chinese?"

Bessent wants the focus moved from Huang's personal "foibles" to the legal and national-security questions, and he put a clock on it. "I want to keep coming back to what was the culture at Nvidia, and were they pressing these seemingly illicit sales to goose their revenues and their earnings?" he said. "And I think we need answers in the next 10 days from the board and from the outside counsel."

Nvidia's strong independent lead director brought in outside counsel, Bessent noted, "and I think we're going to get an explanation on this culture of noncompliance at Nvidia."

The Treasury chief again pointed at Commerce Secretary Howard Lutnick over Megaspeed, which Treasury had wanted blacklisted. "As I said, many other departments were pushing for this, and Commerce had the pen," Bessent said, repeating the line he used against Lutnick on Friday.

Rep. John Moolenaar, the Michigan Republican who chairs the House Select Committee on the CCP, confirmed that Huang has agreed to a closed-door interview with three House committees (Foreign Affairs, Intelligence and his own China panel) along with representatives from Nvidia. "We are in the process of discussing exact dates, but yes, they said they will be forthcoming and work with the committee," he told CBS' Margaret Brennan, who had asked about a Dec. 1 session.

The lawmakers want to know "to what degree privileged information was accessed" and "to what degree this potential alleged Chinese spy influenced Nvidia's philosophy," Moolenaar said. Alice Huang, he noted, "set up a company that has been able to access over $12 billion of high-end chips," and investigators are looking at whether those chips were smuggled into China.

"That was simply irresponsible and a direct threat to our national security," Moolenaar said of Jensen Huang's relationship with a Chinese national, "knowing that every Chinese national can be pressured by the Chinese Communist Party."

As we detailed, Alice Huang is a former Megaspeed International executive whom US officials suspect of being a Chinese spy. The scandal broke on a New York Times report that China's top spy agency recruited her to gather intelligence on Huang and Nvidia's AI chips, a warning that came in a classified memo overseen by Secretary of State Marco Rubio, as we reported on Saturday. Huang resigned as CEO and left the board on Thursday, and the board named CFO Colette Kress interim CEO while it weighs "internal and external candidates," according to Nvidia's announcement.

That puts Kress on stage for Nvidia's third-quarter results on Tuesday, after the stock fell 12.7% last week. Arm CEO Rene Haas has led the betting to replace Huang.

Some of Nvidia's biggest backers want the opposite of an outsider. Altimeter Capital's Brad Gerstner and Atreides Management's Gavin Baker urged Nvidia's board to take a "slow, measured, and deliberate" approach to the succession, one that leaves room for "the potential return of Jensen Huang," in a letter Gerstner posted on X.

On Capitol Hill, the scandal is feeding a bipartisan push for export-control legislation that would curb China's access to AI chips and chipmaking equipment, which Moolenaar wants in the National Defense Authorization Act. Bessent rejected it on Sunday: "I don't think we need the legislation. We have all the rules we need. We just need them enforced."

Moolenaar disagreed on the same morning: "you actually need acts of Congress to put that in place."

0