(Nov 13): Fallout from Jensen Huang’s ouster as Nvidia Corp chief executive officer is reaching deep into Washington, where Commerce Secretary Howard Lutnick is confronting accusations that his department didn’t do enough to keep the company’s prized artificial intelligence (AI) chips out of China’s hands.
As the ultimate overseer of US export control programmes, Lutnick is accountable for any policy or enforcement gaps that allowed Nvidia’s AI processors to reach unauthorised Chinese buyers. Internal tension over his role burst into the open on Friday when Treasury Secretary Scott Bessent blamed him for failing to blacklist a Singapore-based company, Megaspeed, over possible violations.
“Treasury, USTR and State — they were in favour of putting Megaspeed on the entity list for months but Commerce has the pen,” Bessent said in an interview with CNBC. “We have all the authorities that we need. They just need to be implemented.”
Lutnick is a controversial figure in President Donald Trump’s orbit. People with ties to the White House, who asked not to be identified describing private conversations, said he’s been marginalised within the administration for a while. At the same time, his exit has been predicted before, and he’s still in the job.
As of Thursday, the Commerce chief retained Trump’s blessing. In a statement, the White House said Trump maintains complete confidence in the secretary and his ability to carry out the position as the most transformative commerce secretary in modern history.
Congress is now demanding answers from Lutnick and other Trump administration officials about decisions that may have made it easier for China to obtain Nvidia’s advanced chips as well as the degree to which Silicon Valley leaders like Jensen Huang may have influenced policy.
Pressure on the administration and the tech sector is escalating a week after an election where voters expressed intense frustrations over the impact of the AI boom.
Huang’s abrupt departure was prompted by revelations that he’d had an affair with a woman suspected by US officials of spying for China and Megaspeed had been under investigation by Commerce for possible export control violations. Megaspeed has denied any wrongdoing, while the former Nvidia chief’s romantic partner, Alice Huang, is now in China.
“I would like for Secretary Lutnick ASAP to come testify before the Senate Banking Committee because we have a lot of bipartisan questions and concerns about what’s happened over the last year,” Senator Jim Banks, an Indiana Republican, said in an interview on Fox News.
Late on Thursday night, a Commerce Department spokesperson, Kristen Eichamer, said Lutnick has agreed to testify.
Axios reported on Wednesday that Trump had authorised a new crackdown on companies suspected of diverting advanced AI chips to China, but that Lutnick delayed acting on the directive. Representative Raja Krishnamoorthi, an Illinois Democrat, called the report “deeply, deeply disturbing”.
On at least three separate occasions earlier this year — in May, August and earlier this month — Trump approved taking action against suspected diversions of Nvidia chips to China, Axios reported.
This week’s events are “a freaking disaster at this point, and it deserves tremendous scrutiny not only by obviously Nvidia’s board, but by the intelligence community and the US government as well,” Krishnamoorthi said in an interview on Bloomberg Television on Wednesday.
Further complicating the dynamic are allegations by Democratic lawmakers that Lutnick’s sons, who hold leadership positions at Cantor Fitzgerald, are profiting off of policy decisions that he makes. Lutnick, who previously was CEO of Cantor, divested his stake as legally required before becoming secretary, and elevated his sons to top jobs at the firm.
The Commerce Department didn’t immediately respond to a request for comment. Cantor Fitzgerald declined to comment.
One element of the Nvidia imbroglio is a little-known but powerful Commerce Department agency that’s known as the Bureau of Industry and Security (BIS) and falls under Lutnick’s jurisdiction.
BIS regulates exports of a wide range of products — including advanced AI chips — and it’s set to face renewed scrutiny as lawmakers threaten probes into the bureau’s leader, Under Secretary of Commerce Jeffrey Kessler.
The Senate Banking committee is already planning inquiries into Lutnick and Kessler’s decision-making. The two men “must explain why they have not closed export control loopholes and act today to ensure our advanced technology is not fueling China’s military,” Senator Elizabeth Warren, the top Democrat on the committee, said in a statement.
In late summer 2025, Nvidia General Counsel Tim Teter called Kessler to ask whether BIS was involved in the Singapore government’s recent detention of Alice Huang, Bloomberg News reported this week. BIS was not involved in that action, Bloomberg reported earlier, citing people familiar with the matter.
An Nvidia spokesperson has said that Teter was unaware of the affair at the time he called Kessler about Alice Huang’s detention in Singapore. But in the weeks following the call, BIS staff were muzzled in their ability to investigate the company, including a mandate that they route all request of Nvidia through Kessler, Bloomberg reported.
BIS spokespeople earlier denied any wrongdoing.
“It’s really important to understand what the Commerce Department knew about Megaspeed,” said Ben Buchanan, former White House special adviser for AI during the Biden administration, in a Bloomberg Television interview. “This is an incident where the enforcement is not good. The decision making has not been good.”
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