Lutnick delayed tougher Nvidia chip controls, New York Times reports

Commerce Secretary Howard Lutnick repeatedly delayed tougher controls on Nvidia’s chip sales and overseas computing access, The New York Times reported on November 12. The investigation describes resistance inside the agency responsible for enforcing those restrictions, even as other senior officials sought to limit Chinese companies’ access to advanced American AI technology.

A rollback left remote access unresolved

The dispute reaches beyond shipping processors across borders. Although the United States bars its most advanced chips from direct export to China, Chinese companies can use them remotely through data centers in Southeast Asia. The hardware stays overseas while customers gain access to its computing power.

The Biden administration issued regulations addressing that route in January 2025. The Trump administration rolled them back shortly after taking office, leaving officials to argue over a replacement. Commerce now says it is actively considering new remote-access rules with other agencies; no replacement rule has been issued.

Lutnick initially used export restrictions aggressively. But a sweeping September 2025 rule extending restrictions to tens of thousands of Chinese companies prompted China to cut rare-earth supplies. The administration suspended the measure as part of a trade pact. People familiar with those events told the Times that the backlash made Lutnick more cautious.

October’s proposal meets resistance

By October 2026, officials were seeking sweeping limits on Chinese companies’ remote access to AI computing in Southeast Asia. According to the Times’ account of internal discussions, the State and Treasury departments supported proceeding, and President Trump had signed off on the proposal.

Commerce deputy Jeff Kessler then conveyed Lutnick’s substantial policy objections. Lutnick questioned the urgency, stressed the consequences for other countries and Nvidia, and warned colleagues that action could provoke another trade war with China. He wanted further discussions with Trump, the Times reported.

His defenders offered a different explanation for the department’s caution. One person who witnessed chip-policy discussions told the Times that Trump was often the official most sympathetic to Lutnick’s position. Another official said the president wanted a good relationship with Chinese President Xi Jinping.

Commerce disputes the pressure account

The investigation also describes unusual access for Nvidia inside Commerce. Current and former officials said its matters received priority and were routed through Kessler. Nvidia general counsel Tim Teter could comment directly on draft regulations affecting the company, according to the Times.

The Times reported that Commerce shut down an inquiry into suspected chip smuggling by Singapore-based Megaspeed and transferred it to the Justice Department after Teter contacted investigators. That sequence does not establish that his outreach caused the transfer. The suspected smuggling remains an allegation.

The department denied the Times’ account that Treasury Secretary Scott Bessent confronted Lutnick last week over why Megaspeed had not been barred from buying chips. A spokeswoman also rejected the suggestion that Trump’s relationship with Jensen Huang discouraged enforcement, calling it “false and reckless.”

Commerce pointed to major chip-smuggling prosecutions and its license requirement for Nvidia’s H20 chip as evidence of enforcement. Nvidia declined to comment to the Times, and the White House did not respond.

Congress is seeking the decision trail. In a November 11 records-preservation request, Senators Elizabeth Warren and Chris Coons sought communications involving Nvidia, smuggling investigations and decisions to weaken or suspend AI export controls. They asked Lutnick, Marco Rubio and Stephen Miller to confirm preservation directives by November 17.