Lutnick Defends Commerce Department Amid Push for Stricter Nvidia Chip Controls
Critics say Howard Lutnick, the United States’ commerce secretary, has protected Nvidia from tighter regulatory scrutiny as concerns have grown about advanced artificial intelligence (AI) chip exports to Asia—particularly China.
Internal Tensions Over Technology Sales Policy
Within the Trump administration, there is broad agreement among senior officials that U.S. export controls on Nvidia’s AI chips should be significantly tightened to prevent China from gaining a competitive advantage in AI development and military technology.
Lutnick, however, has frequently clashed with top aides over how to regulate sales of high-end technologies, especially those involving Nvidia products sold to Asian firms. Current and former department officials report that Nvidia matters are given priority within the Commerce Department and routed through Jeff Kessler, Lutnick's deputy—someone who rarely takes significant actions without direct approval from the secretary.
Nvidia’s Close Ties Within the Department
There is an established pattern of interaction between Lutnick and Jensen Huang, co-founder of Nvidia. The two have held private meetings in Lutnick’s office on the fifth floor of the department building. Nvidia’s general counsel, Tim Teter, has also been granted direct access to shape draft regulations affecting the company.
An internal inquiry into whether Megaspeed—a Singapore-based firm—was smuggling Nvidia chips into China was shut down late last year after Teter contacted Commerce investigators directly, invoking Kessler's name as a point of authority. That investigation was later transferred to the Justice Department.
White House Pressure and Internal Frictions
In recent weeks, tensions escalated following revelations from The New York Times that Jensen Huang had a relationship with Alice Huang, a top executive at Megaspeed believed by U.S. intelligence agencies to be involved in chip trafficking operations aimed at transferring technology to China.
On Thursday, Jensen Huang announced he would step down as CEO of Nvidia, prompting a sharp drop in company shares. This development has intensified scrutiny over Lutnick’s role in safeguarding Nvidia's interests—and whether his close ties have delayed or obstructed enforcement actions against firms like Megaspeed.
Treasury Secretary Scott Bessent confronted Lutnick during a White House meeting last week, demanding an explanation for why the United States had not already banned sales of chips to Megaspeed. In response, Lutnick stated that new export controls could be implemented soon.
A Commerce Department spokesperson denied both the specific meeting between Bessent and Lutnick and claims that President Trump’s personal relationship with Huang has influenced policy decisions. The official called such assertions 'false and reckless' and emphasized that the department has charged defendants in multiple major criminal investigations involving chip smuggling and has imposed licensing requirements on Nvidia's H20 chip—actions taken under current administration policies, distinct from those during the Biden era.
Contradictions in Public Statements
In his confirmation hearing earlier this year, Lutnick pledged a strong stance against technology sales to China: ‘We need to stop helping them,’ he said, referring to China’s AI progress. He stated at the time that he would be ‘very strong’ on oversight of U.S. exports to China.
Critics argue that since then, Lutnick has become one of the most significant obstacles to implementing stricter export controls on Nvidia products. While officials such as Secretary of State Marco Rubio and Trade Representative Jamieson Greer have publicly expressed concerns about these chip sales, their recommendations have been met with resistance within the Commerce Department.
Nvidia declined to comment directly on the matter. The White House did not respond to requests for clarification or commentary.
As of now, no official U.S. government action has banned all sales of advanced AI chips from Nvidia to firms linked to China. All information presented here is based solely on public reports in media outlets, including The New York Times, and internal disclosures reported by anonymous sources familiar with departmental deliberations.