WASHINGTON, D.C. — Treasury Secretary Janet Yellen on Tuesday criticized the Commerce Department for not adding Singapore‑based Megaspeed Technologies to its Entity List, saying the omission allowed the firm to continue selling high‑speed AI accelerators to U.S. customers.

Yellen told reporters that the department “failed to act swiftly enough” after the Department of State flagged Megaspeed for alleged ties to a Chinese‑controlled research consortium. The firm, which posted $1.2 billion in revenue last fiscal year, markets a line of AI chips that compete directly with Nvidia’s H100 series.

Industry analysts note that the lapse could reshape the competitive landscape for enterprise AI hardware. According to IDC, the global AI chip market is projected to reach $120 billion by 2028, with Nvidia currently holding roughly 55 percent of market share. If Megaspeed’s products gain wider adoption, U.S. firms may face new pricing pressure and supply‑chain diversification challenges.

In a statement, Nvidia CEO Jensen Huang said the company “remains committed to complying with all export regulations” but added that “individual employees who knowingly circumvent the law must be held accountable.” The comment follows internal reports that a small team of engineers discussed alternative routing of Megaspeed components through third‑party distributors.

The Commerce Department has sanctioned 27 foreign entities this year, according to its public database. Critics argue that the agency’s review process is too slow for the rapid pace of AI innovation, while the department maintains that each case undergoes a rigorous inter‑agency assessment.

Key Takeaways

• Megaspeed was not placed on the Entity List despite a State Department warning.
• Nvidia emphasizes employee responsibility for any export‑law violations.
• The AI chip market’s growth could intensify scrutiny of supply‑chain compliance.

Both the Treasury and Commerce departments say they are reviewing procedures to ensure faster responses to future threats, while industry players watch closely for any regulatory shifts that could affect enterprise AI adoption.