Trump Backs Lutnick After Report Says Commerce Chief Stalled Nvidia Chip Crackdown Three Times
Trump Backs Lutnick After Report Says Commerce Chief Stalled Nvidia Chip Crackdown Three Times
President Donald Trump has approved a crackdown on companies suspected of diverting Nvidia’s advanced artificial intelligence chips to China three times this year, but the restrictions still have not taken effect, Axios reported on Wednesday, citing six high-level sources briefed on or present for the discussions. On Thursday, hours after Nvidia chief executive Jensen Huang resigned, a White House official told CNN that Trump maintains “complete confidence” in Commerce Secretary Howard Lutnick, the official accused of stalling the crackdown.
The report describes a striking gap between White House authorization and enforcement. Trump signed off on the measures in May, again in August, and a third time on November 5, according to Axios. Each time, the Commerce Department, which is responsible for carrying out export controls, did not implement them.
The November 5 meeting
The latest approval came after a confrontation inside the White House. On November 5, Treasury Secretary Scott Bessent challenged Lutnick in a Situation Room meeting over why Megaspeed, a Singapore-based Nvidia customer suspected of diverting advanced chips to China, had still not been placed on the Commerce Department’s Entity List, the trade blacklist for companies deemed national security risks.
Defense Secretary Pete Hegseth, U.S. Trade Representative Jamieson Greer and Secretary of State Marco Rubio were also in the room, according to the Axios account. The group then moved to the Oval Office, where Trump consulted tech adviser Elon Musk, who supported imposing the controls. Lutnick warned that the restrictions “will start a trade war with China” and proposed developing options instead. Trump told the officials, “Let’s get it done.”
Outside the Oval Office, Lutnick said he would “develop some options and come back,” according to the report. The restrictions had still not been enforced when Axios published its story on Wednesday.
The Commerce Department disputed the account of the meeting. “This is false. Secretary Bessent and Secretary Lutnick had no such conversation,” Commerce spokesperson Kristen Eichamer told Axios. The department did not immediately address the other allegations in the report.
Megaspeed and the Entity List
At the center of the dispute is Megaspeed, a Singapore company that markets cloud computing services using Nvidia processors. U.S. authorities suspect the firm of helping Chinese customers obtain restricted Nvidia chips, and the Justice Department is investigating the alleged diversion.
Axios describes Megaspeed as suspected of funneling more than $4 billion of Nvidia chips to China. Senators Elizabeth Warren and Chris Coons demanded on Wednesday that the administration preserve all records tied to Nvidia chip exports to China, and their letter said Megaspeed had bought more than $4.8 billion in advanced Nvidia AI chips since June 2024. The Financial Times reported separately that Commerce delayed adding Megaspeed to the Entity List.
An independent check of Commerce’s consolidated screening data found no entry under Megaspeed’s name as of November 11. A review of the Federal Register found that Commerce has not added a single company to the Entity List in more than a year.
On November 5, the same day Trump said “Let’s get it done,” Commerce pushed back to January 10, 2027, a frozen rule that would have extended Entity List restrictions to any company at least 50 percent owned by a listed firm.
Trump stands by Lutnick
The White House moved quickly to defend Lutnick after the report and after Huang’s resignation. “President Trump maintains complete confidence in the secretary and his ability to carry out the position as the most transformative commerce secretary in modern history,” a White House official told CNN. Bloomberg also reported on Thursday that Trump had reaffirmed his support for Lutnick.
The backing came as Republican lawmakers pressed for answers. Senator John Kennedy and Representative Bill Huizenga want Lutnick to explain the chip sales, and Huizenga wants the commerce secretary to testify before Congress.
The dispute is part of a broader disagreement inside the administration over how tightly to restrict China’s access to advanced American AI chips. Lutnick and Commerce Undersecretary Jeffrey Kessler have resisted pressure from Bessent and other officials to move forward, according to Axios, even as the White House has now authorized the action three times.
Background: the Nvidia scandal
The crackdown fight has unfolded against the backdrop of a widening scandal at Nvidia. Jensen Huang resigned on Thursday after revelations of an affair with Alice Huang, a Singapore data-center executive whom U.S. officials have concluded is a Chinese intelligence asset, according to The New York Times. China denies the claim, and Alice Huang has not been charged.
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The Information reported that Alice Huang’s connections helped facilitate at least $7.5 billion in Nvidia chip shipments to Chinese firms since 2023. Reuters could not independently verify that report, and it does not say that Jensen Huang knew about or approved any diversion. Nvidia’s board opened an independent investigation into the reports earlier this week, and Huang told Trump he did not know the woman was an operative.
Nvidia lost about $400 billion in market value in two days this week as the scandal deepened, and the company’s shares fell sharply again in premarket trading on Thursday. Nvidia reports third-quarter results on Tuesday, November 17, and Huang is due to appear before a House committee on Wednesday, November 18.
Why this matters
Export controls only work if they are enforced. The White House can authorize restrictions, but the Commerce Department’s Bureau of Industry and Security must translate that approval into specific designations, licensing rules or formal investigations before anything changes on the ground. A delay at Commerce can therefore slow enforcement even after the president has signed off, and in this case the delay has now stretched across three separate approvals.
The stakes are high. Nvidia’s most advanced chips power the data centers behind modern AI systems, and Washington has spent years trying to keep them out of Chinese hands. China, including Hong Kong, brought Nvidia $19.7 billion of revenue in the year ended January 2026, down from $25.0 billion the year before, as controls tightened. If a suspected diverter can keep buying billions of dollars’ worth of chips while the government debates, the controls lose much of their force.
Congress is now moving to fill the gap. Lawmakers are likely to attach chip provisions to this year’s defense bill, and a Commerce rule extending controls to seven more countries could come this month. Senators Warren and Coons have given the administration until November 17 to confirm in writing that the Nvidia records have been preserved, and they have requested a congressional briefing.
Latest developments
The next tests come quickly. Nvidia’s earnings report on November 17 will show how much damage the scandal has done to the company’s business, and the House committee briefing on November 18 will put the export-control questions directly to Nvidia’s leadership. Whether Commerce finally adds Megaspeed to the Entity List, and whether Lutnick testifies before Congress, will show whether the third presidential approval produces a different result from the first two.
Frequently Asked Questions
What is the Entity List?
The Entity List is the Commerce Department’s trade blacklist. Companies on it face strict licensing requirements before they can buy American technology, including advanced semiconductors. Commerce’s Bureau of Industry and Security maintains the list and enforces the restrictions.
Who is Megaspeed?
Megaspeed is a Singapore-based company that markets cloud computing services using Nvidia processors. U.S. authorities suspect it of diverting Nvidia chips to China, and the Justice Department is investigating. According to a Senate letter, Megaspeed bought more than $4.8 billion in advanced Nvidia AI chips since June 2024. It is not on the Entity List.
Has Trump fired Lutnick?
No. A White House official told CNN on Thursday that Trump maintains “complete confidence” in Lutnick, calling him “the most transformative commerce secretary in modern history.” The statement came hours after Nvidia chief executive Jensen Huang resigned.
What happens next?
Watch for three things: whether Commerce adds Megaspeed to the Entity List, whether Lutnick testifies before Congress, and whether the administration meets the November 17 deadline to confirm that Nvidia-related records have been preserved. Nvidia reports earnings on November 17, and its leadership faces a House committee briefing on November 18.
President Trump has now ordered the same crackdown three times. The question is whether the third order will be the one that finally takes effect.
