FACTS
Commerce Secretary Howard Lutnick has agreed to testify to the Senate Banking Committee about U.S. oversight of Nvidia chip exports to China, as lawmakers from both parties press his department for answers, NBC News reported Thursday, Nov. 12. On Friday, Nov. 13, Treasury Secretary Scott Bessent said other agencies had favored restricting a Singapore company tied to the case for months but that the Commerce Department “has the pen,” according to Fortune. Two news organizations reported that some of President Donald Trump’s advisers have discussed whether Lutnick should leave his post.
Lutnick agrees to testify
Senate Banking Committee Chairman Tim Scott, R-S.C., sent letters asking Lutnick to appear voluntarily on Dec. 10 and former Nvidia CEO Jensen Huang on Dec. 3, NBC News reported. Huang resigned on Thursday, as Stay Current News reported. A U.S. official told CBS News that Lutnick agreed to the Dec. 10 date.
“Secretary Lutnick has proactively agreed to appear voluntarily before the Banking Committee to address their questions,” a Commerce Department spokesperson said in a statement, according to the New York Post.
Lawmakers in both parties have pressed for testimony. Sen. Richard Blumenthal, D-Conn., said Lutnick “may need to be subpoenaed” if he does not appear voluntarily, and Sen. Thom Tillis, R-N.C., urged him to testify before Thanksgiving, NBC News reported. Sen. Jim Banks, R-Ind., said on Fox News that Lutnick “used loopholes to allow some of these chip sales to occur,” according to CBS News.
Bessent points to Commerce on Megaspeed
Many of the questions concern Megaspeed International, a Singapore-based company the U.S. government suspects of directing advanced Nvidia chips to China, CBS News reported. CBS said the company was previously led by Alice Huang, whom U.S. authorities suspect of spying for China. Republicans want Lutnick to explain why Commerce did not add Megaspeed to the Entity List, a trade blacklist that would have restricted its access to advanced chips, CBS reported.
“There was coordination. Treasury, War, USTR, and State were in favor of putting Megaspeed on the entity list for months,” Bessent told CNBC on Friday. “But Commerce has the pen,” he said, according to Fortune. “I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above A100s,” Bessent said, adding that “any leakage is very frustrating because it hurts our great companies in the AI race, gives the Chinese an advantage,” CNN reported.
Megaspeed said it takes its obligations under U.S. export control laws “extremely seriously,” adding, “Compliance is a fundamental priority for the company,” Reuters reported.
White House stands by Lutnick amid reports
“Senior White House officials are discussing whether Commerce Secretary Howard Lutnick should be pushed out,” Reuters reported Thursday, citing two people familiar with the situation. CNN reported that some Trump advisers have discussed whether he should be dismissed, citing people familiar with the conversations, and said it was unclear what Trump might do.
The White House said Trump “maintains complete confidence in the secretary and his ability to carry out the position” and called Lutnick “the most transformative Commerce Secretary in modern history,” according to CNN.
Records request and export licenses
Democratic Sens. Elizabeth Warren of Massachusetts and Chris Coons of Delaware asked Secretary of State Marco Rubio, White House Chief of Staff Stephen Miller and Lutnick to preserve records on Nvidia’s advanced chip exports to China, including communications between Nvidia executives and senior officials, Fox Business reported. “This incident raises significant concerns about the federal government’s ability to effectively enforce our export controls,” the senators wrote, asking for written confirmation by Nov. 17.
Earlier this month, The New York Times reported that Commerce had approved two Chinese firms, New Matrix and Maginfra, to receive Nvidia H200 chips, and that their listed offices appeared empty, according to Tom’s Hardware. The Times linked New Matrix’s owners to Wise Road, a private equity firm sanctioned by the U.S., Tom’s Hardware reported. A spokesman for Commerce’s Bureau of Industry and Security told the Times the bureau reviews all applications for national security risks, the Daily Caller reported. Nvidia spokesman John Rizzo told the Times that “it makes no sense for the Chinese military to depend on American technology,” according to the Daily Caller. Nvidia has said it complies with U.S. export laws, NBC News reported.
Congress weighs limits on Nvidia chip exports
House Speaker Mike Johnson, R-La., told reporters Thursday, “I’m in favor of limiting those exports, and I think there’s a developing consensus in Congress,” Reuters reported. “Especially in the light of recent developments, it makes sense,” Johnson said.
The Commerce Department and Nvidia did not immediately respond to Fortune’s requests for comment on Friday.
More coverage is in the Stay Current News Business section.
