Senior White House officials are discussing whether Commerce Secretary Howard Lutnick should be pushed out over the Nvidia Corp. spy scandal, according to Reuters1,6.
The deliberations follow public criticism from Treasury Secretary Scott Bessent, who told CNBC that his department and others in the Trump administration have long supported imposing restrictions on Megaspeed, the Singapore-based company accused of serving as a pass-through for advanced Nvidia chips reaching China2. Bessent said the departments of Treasury, Defense and State and the Office of the U.S. Trade Representative were in favor of putting Megaspeed on the entity list for months, but that the Commerce Department is in charge of export controls.
Bessent's public break
Bessent told CNBC there is significant leakage in the system involving Nvidia chips and that officials are working to close it down. He said Nvidia's highest-level processors may have made it to China using Megaspeed as a pass-through. Bessent added that anyone at Nvidia should be held accountable if the company failed to prevent leakage to shell companies. He also said President Trump made it very clear that China should not receive any Nvidia chips above H100s.
An Axios report, referenced by CNBC, described Bessent asking Lutnick in the White House Situation Room last week why he had resisted implementing export controls, especially on Megaspeed.
Congressional testimony
Lutnick has agreed to appear voluntarily before the Senate Banking Committee on Dec. 10, after Chairman Tim Scott summoned him amid scrutiny over whether Nvidia could have supplied advanced AI chips to Chinese companies3. Former Nvidia CEO Jensen Huang, who resigned on November 13, has been asked to appear before the same committee on Dec. 3. Huang had pushed the U.S. government to ease restrictions on the export of advanced AI chips to China.
House panels are also moving: the Republican chairmen of the House committees on China, intelligence and foreign affairs asked Nvidia general counsel Tim Teter to participate in a closed-door interview on Dec. 2, and House Foreign Affairs Chairman Brian Mast asked Jeff Kessler to appear before his committee on Dec. 3 for a hearing on chip smuggling. Huang has been asked to sit for a closed-door briefing on Dec. 1 before those House committees.
Senate Democratic leader Chuck Schumer said Huang and Nvidia must answer whether America's security had been jeopardized, adding that the Trump administration must also account for what it did once it learned about Huang's reported relationship with Alice Huang, who is accused of spying for China5. The Guardian reported bipartisan concern and calls for a tougher stance against Beijing.
Business Insider reported the scandal is casting a shadow over data centers internationally4.
ANALYSIS The convergence of White House discussions about Lutnick's future, Bessent's pointed public criticism of Commerce, and bipartisan congressional summonses marks a rapid escalation: the Nvidia chip-export controversy has moved from a corporate scandal to a direct test of Cabinet-level accountability over AI export controls.