Treasury Secretary Scott Bessent on Sunday questioned whether Nvidia’s earnings might have been inflated by inappropriate sales to China and urged the company to hire an outsider as CEO.
Why it matters: Nvidia is central to the AI economy, which has been key to U.S. economic growth.
- The Treasury secretary casting doubt on the quality of its financial results and leadership could be a blow to an already shaky market.
- Since the scandal broke open in late October, Nvidia shares have shed more than $1.8 trillion in market capitalization, with impacts on millions of Americans.
In a Fox News appearance Sunday morning, Bessent said Nvidia owes the market an explanation amid allegations former CEO Jensen Huang had an affair with a Chinese spy and oversaw sanctions-evading chip sales to Asian companies.
- “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?” Bessent said.
- “I think we need answers in the next 10 days from the board and from the outside counsel.”
Bessent also said it was “obvious” that some companies doing business with Nvidia were shell companies for Chinese interests and accused the chipmaker of a “culture of noncompliance.”
- “This makes me think that as the board conducts the search for a new leader, that they need to go outside the company,” he said.
For the record: Nvidia did not immediately respond to a request for comment on Bessent’s remarks.
Huang has been a favorite of President Trump and other administration figures for some time, but Bessent has notably not been as effusive about him as others.
- In recent days, Bessent has also made clear that the Commerce Department has questions to answer about why it didn’t impose tighter controls on Nvidia’s exports.
- As Axios reported earlier this week, administration officials have accused Commerce Secretary Howard Lutnick of stalling curbs on Nvidia’s exports.
What to watch: Nvidia is due to report quarterly results on Tuesday, its first significant public comments since Huang resigned and CFO Collette Kress took over as acting CEO.
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