Commerce Secretary Howard Lutnick stalled efforts to curb Nvidia chip sales to China after a high-level confrontation in the Oval Office, according to Yahoo News.
President Trump authorized three crackdowns on suspected chip diversions this year. But Lutnick has reportedly resisted implementing specific export controls.
The delay follows a standoff among administration officials. They debated whether to blacklist Megaspeed, a Singapore-based Nvidia customer. Officials accuse the firm of funneling billions of dollars in chips into China.
Cabinet officials clash in the Situation Room
Lutnick did not know the reason for the omission, he said, according to Axios.
The meeting included Director of National Intelligence Jay Clayton and Pete Hegseth. White House officials also attended the meeting. These officials reportedly pressed Lutnick and Commerce Undersecretary Jeffrey Kessler to act. They were refused, according to a source cited by Yahoo News.
Lutnick reportedly said, “I need to check with the president,” Yahoo News reported.
The group moved to the Oval Office after the discussion. Trump consulted tech advisor Elon Musk before he agreed to move forward with the controls. Trump reportedly told officials, “Let’s get it done,” Yahoo News reported.
But Lutnick later proposed a delay. He suggested he would develop options and return later. One source told Yahoo News that although the decision was made, “it still hasn’t happened.”
Bessent confronted Lutnick, Yahoo News reported.
Megaspeed faces scrutiny over the Entity List
Megaspeed has purchased more than $4.8 billion in Nvidia chips since mid-2024, Crypto Briefing reported. The company is at the center of a probe. Investigators are checking if U.S. chips are being diverted to China. Megaspeed denies moving chips illegally, Yahoo Finance reported.
The Commerce Department’s Entity List restricts foreign companies from accessing sensitive U.S. technology. It has not added a new name since October 9, 2025, Yahoo Finance reported. If Megaspeed were added, it would be the first new name on the list in 13 months.
More than 100 entities are reportedly waiting for approval from a review panel. This includes the Chinese AI lab DeepSeek. However, Reuters reported that Commerce has not published them.
Trade policy is “overshadowing the use of a critical national security tool,” former Commerce official Kevin Kurland said.
Nvidia loses value as export policies waver
Uncertainty over export policies coincided with a decline in Nvidia’s market value. Nvidia’s market value shed an estimated $700 billion as of mid-November 2026, Crypto Briefing reported.
Sen. Tom Cotton sent a letter in October 2025. He warned Lutnick about the Singapore-based firm. The firm’s chip orders were nearly 2% of the global data center sales of a U.S. company, he said.
A highly classified memo was shared with the president and other officials in May. This occurred before President Trump’s trip to China on May 13-15, 2026. The memo contained warnings about Nvidia CEO Jensen Huang’s ties to Alice Huang. U.S. intelligence suspects the Megaspeed employee is a Chinese agent, Crypto Briefing reported.
Lutnick has reportedly argued that selling less powerful chips helps national security. He suggested selling chips like Nvidia’s H200 to China maintains Chinese dependence on U.S. technology. This would prevent them from developing their own alternatives, Yahoo News reported.
Trump has previously agreed to allow H200 sales. He would do so in exchange for a 25% tariff, Yahoo News reported.
Lawmakers demand answers by December
Democratic lawmakers set a deadline of December 1, 2026. They want the Commerce Department to provide accountability on the issue, Crypto Briefing reported.
Lutnick’s response will show if congressional pressure can move the department, Crypto Briefing reported.
Bessent said in September that this deal would last until that date. It froze a rule that would have extended blacklist curbs to any company with at least 50% ownership by a listed firm.
On November 5, Commerce pushed the frozen rule to January 10. This was the same day as the Situation Room confrontation, according to law firm Baker McKenzie, Yahoo Finance reported.
Will the Commerce Department meet the December deadline for accountability?