By Townhall Chicago News Staff
President Donald Trump authorized a crackdown on companies suspected of diverting NVIDIA’s advanced AI chips to China, but Commerce Secretary Howard Lutnick stood in the way of the effort, according to an Axios report.
The dispute adds to scrutiny of how the administration is enforcing export controls meant to keep advanced U.S. semiconductor technology from reaching China. Lutnick could not explain why Mega Speed International, a Singapore-headquartered data center company, was not on the federal Entity List when he was questioned at a National Security Council meeting by Treasury Secretary Scott Bessent, the Axios report said.
Sen. John Kennedy, R-La., said Lutnick should publicly explain the decision.
“The obvious question is why did he choose to sell advanced chips,” Kennedy said. “Secretary Lutnick needs to answer that in front of God and country.” Kennedy said he expects a congressional investigation even if Lutnick does not address the matter first.
Author and China analyst Gordon Chang said Lutnick’s Commerce Department issued export licenses for chip sales to companies he described as fronts for the Chinese government, allowing chips to reach the Chinese Ministry of State Security and the Chinese military. Chang also said Under Secretary Jeffrey Kessler ended a Commerce Department investigation into NVIDIA’s ties to Mega Speed.
“That looks extremely disturbing, if not criminal,” Chang said.
Chang said the gap between U.S. and Chinese semiconductor technology is the reason the export licenses matter, pointing to Chinese government investment in domestic chipmaking.
“Xi Jinping has put the development of semiconductors at the top of his list of things to do,” Chang said. “China cannot compete with us on AI without our help, without our semiconductors, without our technology.”
Asked whether Lutnick knew about Mega Speed’s ties to NVIDIA, Chang said the secretary should have known.
“He must have known. If he didn’t know it, he was grossly negligent and shouldn’t be commerce secretary,” Chang said.
Chang distinguished between the policy disagreement over chip sales and the ended investigation, which he said was more serious.
“What I’m talking about is the killing of that investigation, for which there is no justification, and also the gross negligence in issuing export licenses to obvious Chinese front companies,” Chang said. “That had to be a policy decision. That had to come from the top.”
Lutnick has not publicly addressed the Axios report. The claims about the export licenses and the ended investigation have not been independently confirmed, and no congressional investigation has yet been announced.
