Lutnick to Testify on Nvidia Chip Sales as Bessent Faults Commerce
Commerce Secretary Howard Lutnick agreed to appear before the Senate Banking Committee as Treasury's Scott Bessent faulted Commerce over Megaspeed.
Howard Lutnick, the U.S. commerce secretary, has agreed to testify before the Senate Banking Committee about how advanced Nvidia AI chips may have ended up in China. The scandal that forced out Nvidia’s longtime chief executive has now reached Washington’s export control system. The pressure on Lutnick grew on Friday when Scott Bessent, the Treasury secretary, said the Commerce Department had for months resisted other agencies’ efforts to blacklist the company at the center of the affair.
A spokesperson for Lutnick, Kristen Eichamer, said he “proactively agreed to appear voluntarily” to answer the committee’s questions, CNBC reported, citing NBC News. The White House said President Donald Trump “maintains complete confidence in the secretary and his ability to carry out the position,” NBC News reported.
What happened
On Thursday, Sen. Tim Scott, the South Carolina Republican who chairs the Senate Banking Committee, sent letters asking Lutnick and former Nvidia CEO Jensen Huang to testify at public hearings next month. Scott asked Huang to appear on Dec. 3 and Lutnick on Dec. 10. According to CNBC, the letter to Lutnick cited “recent public reports about NVIDIA and the Department of Commerce’s role” that raise national security concerns.
The Banking Committee oversees export policy. The Commerce Department, through its Bureau of Industry and Security, decides which foreign companies go on the “entity list,” a trade blacklist that bars U.S. firms from selling them sensitive technology without a license.
The hearings follow Huang’s resignation on Thursday after more than three decades running Nvidia. He had acknowledged an extramarital affair with an executive tied to Megaspeed, a Singapore-based company. Several outlets have described her as a suspected Chinese intelligence asset. Germany’s dpa news agency reported that U.S. authorities suspect Megaspeed of secretly shipping Nvidia AI chips to China. Nvidia has said it complies with U.S. export laws, according to NBC News. Reports also alleged a second affair, with a senior Nvidia executive who reported to Huang.
Reports differ on how much Megaspeed spent. CNBC said the company bought more than $4.8 billion worth of advanced Nvidia AI chips over the past two years, while dpa, citing U.S. media reports, put the figure at about $4 billion.
Bessent points at Commerce
In a CNBC interview reported by Politico, Bessent said other parts of the government had wanted to blacklist Megaspeed well before the scandal broke. “Treasury, War, USTR and State were in favor of putting Megaspeed on the entity list for months,” he said, adding: “But Commerce has the pen.”
Bessent said the government already “ha[s] all the authorities” it needs. He said he was frustrated that chips were leaking to China, which he said goes against Trump’s stated position. He also called for accountability at Nvidia and for an investigation into whether the company knowingly sold chips to shell companies acting as pass-throughs. “Did Nvidia know their client?” he asked, according to Politico. He said Nvidia’s board would likely conduct a thorough review.
A Commerce spokesperson did not immediately respond to Politico’s request for comment.
Lawmakers from both parties press for answers
Lawmakers from both parties are asking whether Commerce properly oversaw Nvidia’s exports and enforced the rules meant to keep top AI hardware away from Beijing. Sen. Richard Blumenthal, a Connecticut Democrat, said Lutnick “may need to be subpoenaed” if he did not appear voluntarily, and Sen. Thom Tillis, a North Carolina Republican, urged him to come sooner: “Come here before Thanksgiving. Give us the facts,” NBC News reported. CNBC reported other responses:
- Sen. Jim Banks, an Indiana Republican, said on Fox News that Lutnick “appears to have used loopholes to allow some of these chip sales to occur.”
- Sen. Elizabeth Warren of Massachusetts, the committee’s top Democrat, who becomes its chair in January, called on Lutnick and Jeffrey Kessler, the Commerce under secretary for industry and security, to explain why export control loopholes remain open.
- Warren and Sen. Chris Coons of Delaware, the incoming Foreign Relations Committee chair, wrote a letter demanding that all documents on Nvidia chip exports to China be preserved.
- Sen. Ron Wyden of Oregon and Rep. Richard Neal of Massachusetts told Lutnick they are investigating approvals of Nvidia chip sales to companies linked to the Chinese government, its military or sanctioned entities.
- Rep. Brian Mast, a Florida Republican who chairs the House Foreign Affairs Committee, called for a congressional investigation into Commerce’s role but said he still had confidence in Lutnick.
Background and what comes next
Washington has limited sales of advanced Nvidia chips to China to slow the country’s progress in artificial intelligence. Huang had argued that allowing some sales would keep China dependent on American technology instead of pushing it to build its own, dpa noted. Critics have also pointed to a Reuters report from June that the administration declined to add more than 100 Chinese companies to the trade blacklist, including AI developer DeepSeek and memory chipmaker CXMT, CNBC said.
Lutnick has been a friend of Trump for more than 30 years and is widely seen as a close adviser. At the Dec. 10 hearing he is expected to face questions about how the Megaspeed sales were allowed and why the company was not blacklisted earlier. Huang, who once called Lutnick “the person I talk to most in the administration,” according to NBC News, also faces a separate request from Mast to sit for a closed-door, transcribed interview with House lawmakers. Mast said Huang had agreed to brief them, with the date and venue still being negotiated.
