Chris McGuire urges Lutnick to resign over alleged AI-chip enforcement failures

Commerce Secretary Howard Lutnick should lose his job over failures to stop advanced AI chips reaching China, former National Security Council official Chris McGuire argued on November 13. In a New York Times guest essay, McGuire blamed the department’s handling of anti-smuggling controls for enabling alleged diversion and called for immediate enforcement changes.

McGuire, now a senior fellow at the Council on Foreign Relations, previously oversaw export controls and AI policy at the National Security Council. His essay is an argument for accountability, not an official finding that Lutnick or the companies he names broke the law.

The rule McGuire says Commerce left unenforced

The central decision in his account dates to 2025. In January, the Biden administration imposed controls requiring unvetted companies in most countries to obtain Commerce licenses before making large AI-chip purchases. Those checks were intended to counter Chinese chip smuggling, McGuire writes.

Commerce announced that May that it would not enforce the controls and would replace them with other anti-smuggling measures. McGuire says the department never published a replacement or formally rescinded the earlier rules. He argues that this effectively left Nvidia and server suppliers such as Supermicro to assess whether customers posed a diversion risk.

He points to Singapore-based Megaspeed as the consequence, alleging that it smuggled a reported $7 billion in Nvidia chips into China. That figure is an allegation cited in his essay, not an established diversion total. His broader charge is that Commerce’s decisions created conditions in which such transfers could happen.

It should also close the loophole allowing Chinese companies to rent access to chips they cannot legally buy.

Chris McGuire, New York Times guest essay

Buying chips and renting their computing power

McGuire’s criticism extends beyond hardware crossing into China. He argues that Chinese companies can also gain access by renting chips located elsewhere. As an example, he cites DayOne, a Singapore-based data-center operator, and says 70 percent of its revenue comes from renting chips to China-based ByteDance.

Using his own calculations from DayOne’s Securities and Exchange Commission filings, McGuire estimates that its Southeast Asian data centers under construction could host more than 1.5 million advanced Nvidia chips. That is his estimate of planned hosting capacity—not a count of installed processors or chips diverted to China.

Senator Michael Bennet raised both routes in an oversight letter published by his office on November 11. Citing public reporting, the letter described suspected physical diversion through Megaspeed’s Southeast Asian operations and possible remote access for Chinese customers. These were grounds for demanding answers, rather than findings from a completed congressional investigation.

Enforcement demands reach beyond resignation

McGuire calls for Commerce to enforce the anti-smuggling regulations he says remain on the books, or replace them with stricter rules. He also urges Congress to take two steps:

• Pass three pending bipartisan bills—the A.I. Overwatch Act, MATCH Act and Chip Security Act—to require stronger AI-related export controls.
• Investigate why Lutnick and his export-control deputy, Jeff Kessler, did not act on the national-security threat McGuire alleges.

Bennet’s letter seeks a more immediate accounting from the administration. He asked what Commerce had done to prevent Megaspeed from buying Nvidia chips, including whether it had considered shipment-specific licensing requirements or placing the company on the Entity List, the department’s trade blacklist. He also requested details of coordination with Singapore, Malaysia and Indonesia.

Bennet requested written responses from Commerce, Justice, State and the director of national intelligence by November 24, 2026. Those answers would address what the government investigated and which enforcement tools it used—the decisions at the center of McGuire’s demand for accountability.