Bessent Urges U.S.-China AI Dialogue Even as Nvidia Spy Scandal Clouds Summit

Treasury Secretary Scott Bessent called on the United States and China to "harbor no illusions" about their fundamental differences as the two nations launch a new dialogue mechanism on artificial intelligence, delivering his remarks to the National Committee on U.S.-China Relations in New York on Tuesday.

The mechanism, centered on what Bessent described as "super intelligence," or SI, is designed to guard against "shared risks" and prevent any "misunderstanding between our two systems." Under the arrangement, both governments would exchange best practices for testing advanced AI models before release, keep "human judgement firmly in command of the technology," and alert each other to serious incidents involving SI models.

Bessent stopped short of committing to any limits on AI development, reflecting the broader stance of the Trump administration, which has resisted expanding restrictions on the technology out of concern that doing so would cede ground to Beijing.

President Trump offered a nuanced signal on that front in a CBS interview released Sunday. "I don't mind guardrails," he said, while adding that he did not want regulations to put the U.S. in "a deep second position" behind China, which he said had no such restrictions.

China's foreign ministry dismissed calls to slow frontier AI models as recently as September, characterizing such pressure as fearmongering that would disrupt global AI governance. Xie Feng, China's ambassador to the United States, addressed the same New York gala and said cooperation between the two countries "may not resolve every challenge," but "none can be resolved without it."

The dialogue initiative builds on an agreement reached during Chinese President Xi Jinping's September visit to Washington, when the two governments agreed to open a communications channel for defusing serious AI-related incidents.

Both leaders are expected to meet for a third time on the sidelines of the Asia-Pacific Economic Cooperation Leaders' Meeting, scheduled for November 18 to 19, with Bessent also attending.

The diplomatic backdrop, however, is complicated by a widening corporate and national security scandal involving Nvidia CEO Jensen Huang, who has acknowledged an extramarital affair with a Chinese businesswoman whom U.S. intelligence officials suspect of espionage.

Huang, who accompanied Trump's delegation to Beijing in May and attended a White House state dinner in September, now faces scrutiny from both parties in Congress. Republicans and Democrats have issued rare unified calls for investigations into whether Huang may have compromised national security, with concerns spanning committees on intelligence, foreign relations, and banking and finance.

The scandal is simultaneously injecting momentum into a set of legislative proposals that would tighten restrictions on chip exports abroad — an area where Nvidia's influence on Washington policy has already drawn considerable attention. The U.S. government has separately restricted exports of its most advanced semiconductors to China and accused Chinese developers of reproducing American AI models through what officials call industrial-scale distillation.

Washington also briefly suspended foreign national access to Anthropic's Mythos and Fable 5 models in June before restoring it weeks later, underscoring the administration's continuing uncertainty over how broadly to apply technology controls.

Huang's participation in the upcoming APEC summit delegation has been thrown into doubt amid the scandal. Other executives, including Tesla and SpaceX CEO Elon Musk and Mastercard's Michael Miebach, could join Trump's delegation instead, according to the South China Morning Post.

As the APEC meeting approaches, the tension between competitive posture and cooperative necessity will remain central — with Bessent's own formulation capturing the bind both governments face: "Our interests will not always coincide, and our approach to every challenge likewise will not always converge."