Axios: Lutnick Stood in the Way of Trump's Crackdown on Nvidia Chip Diversion to China

Context

Axios reported on Nov 11 that President Trump authorized a crackdown on companies suspected of diverting Nvidia's advanced AI chips to China, and that Commerce Secretary Howard Lutnick repeatedly stood in the way. Earlier that day, Axios reported that Treasury Secretary Bessent confronted Lutnick in the White House Situation Room over why Megaspeed, a company accused of diverting US chips to China, had not been blacklisted. Reuters also reported that a Chinese university linked to the People's Liberation Army bought Nvidia H200 chips despite being on a US export blacklist.

Deep dive

Axios reported in a scoop posted on Nov 11 that President Trump authorized a crackdown on companies suspected of diverting Nvidia's advanced AI chips to China, but that one administration official repeatedly stood in the way: Commerce Secretary Howard Lutnick. Reuters picked up the report, summarizing it as Lutnick stalling the crackdown.

The report followed a separate Axios scoop the same day about a confrontation in the White House Situation Room. According to posts citing Axios, Treasury Secretary Bessent asked Lutnick why Megaspeed, a company accused of illegally diverting US chips to China, had not been blacklisted, and Lutnick answered that he did not know and would look into it. Those posts say officials had warned Lutnick about Megaspeed for months.

The reports landed alongside other evidence of gaps in chip controls. Reuters reported that a Chinese university linked to the People's Liberation Army bought Nvidia's H200 AI chips despite being on a US export blacklist.

Chris McGuire, a commentator on export controls, called the Axios report stunning and wrote that the President reportedly ordered the crackdown three separate times. He argued that Lutnick and Jeff Kessler were defying those orders. These are his claims and characterizations, not confirmed findings.

The Commerce Department oversees US export controls on advanced chips, which makes its enforcement choices central to how many Nvidia chips reach Chinese buyers through other countries. The posts do not include a response from Lutnick or the Commerce Department.

What to expect next

Watch for a response from Lutnick or the Commerce Department, and for whether Megaspeed or other suspected diverters are added to the export blacklist in the coming days. Congress may use the reports to push for stricter chip control laws or hearings. Any visible crackdown on transshipment through Southeast Asia could hit Nvidia sales channels, while continued inaction would fuel criticism that the controls are not working. The story also runs alongside separate pressure on Nvidia's leadership, which could shape how Washington deals with the company.