Howard Lutnick Stalled Trump's Crackdown on Nvidia Chip Diversions to China, Axios Reports

US Commerce Secretary Howard Lutnick repeatedly stalled President Donald Trump's crackdown on companies suspected of diverting Nvidia's artificial-intelligence chips to China, Axios reported on Wednesday, November 11, citing high-level sources. The report exposes a split inside the administration over how aggressively Washington should restrict China's access to advanced American semiconductor technology.

Trump has authorised the crackdown three times this year, Axios reported: in May, in August, and again on Thursday, November 5. The latest approval came after the president consulted billionaire entrepreneur Elon Musk, and was given during an Oval Office meeting involving senior cabinet officials. But despite the president's clearance, the restrictions have yet to be implemented, with Lutnick reportedly continuing to delay the process.

The Situation Room confrontation

The latest confrontation unfolded on November 5, when Lutnick met in the White House Situation Room with Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth, Trade Representative Jamieson Greer and Secretary of State Marco Rubio, who is also national security adviser.

According to Axios, Bessent challenged Lutnick over his department's resistance to carrying out the export controls. The other officials supported Bessent's position. Lutnick appeared to agree but said he needed to check with Trump first, telling the room, "I need to check with the president." One administration official described Lutnick's conduct by saying, "He's stalling it out." Another said, "This is an ongoing concern with Howard and this issue."

Lutnick warned that such a move "will start a trade war with China", according to the report, and had earlier met Trump privately to try to change his mind on the export limit. A Commerce Department spokesperson, Kristen Eichamer, denied that Bessent confronted Lutnick, but did not comment on the other allegations. The White House and a spokesperson for Lutnick did not immediately respond to a request for comment.

Why Lutnick matters

Lutnick's role matters because enforcement sits with the Commerce Department's Bureau of Industry and Security, which licenses chip exports and polices diversion. The department is the agency that would have to carry out any crackdown on companies suspected of funnelling Nvidia chips to China — and it is the agency, according to Axios, that has held it up.

The report is based on interviews with six senior sources who were briefed on the discussions or, in some cases, heard them directly. It lands against the backdrop of the growing controversy around Nvidia chief executive Jensen Huang and his reported relationship with Alice Huang, a Singapore-based executive suspected by US intelligence of having links to Chinese intelligence. Megaspeed, the Singapore cloud company at the centre of that scandal, is the kind of firm a crackdown would target.

The wider chip fight

The United States has restricted exports of its most advanced chips to China as it seeks to maintain its advantage over Beijing in the AI arms race. But enforcement has been uneven. Reuters reported on May 14 that the Commerce Department had cleared about ten Chinese companies to purchase Nvidia's H200 chips, its second-best AI processors.

The tension inside the administration is now public: the president has approved action three times, and the cabinet secretary charged with carrying it out has, according to Axios, stood in the way each time. Whether the November 5 approval is finally implemented — and whether the chip diversion it targets is connected to the Megaspeed investigation — are questions the administration has not yet answered.

Nvidia reports quarterly earnings on Tuesday, November 17, after the US market closes, and investors are expected to press the company on both the export-control questions and its leadership crisis.

Read our earlier coverage: how a blacklisted Chinese university obtained Nvidia's H200 AI chips, and how Singapore's chip hub is caught between Washington and Beijing.

Sources

• News18 — Trump Approved Crackdown On Nvidia Chip Diversions To China 3 Times. Who's The Roadblock? Howard Lutnick (Axios reporting)
• WIXX — Lutnick stalled Trump crackdown on diversion of Nvidia chips to China, Axios reports (Reuters)
• InvestingLive — Lutnick stalls Trump's third Nvidia chip diversion crackdown this year, Axios says
• Times Now — Despite Trump's Go-Ahead, US Commerce Secretary Still Hasn't Acted Against Firms Sending Chips To China