US Commerce Department's Lutnick and Kessler criticized over inaction on Nvidia chip smuggling oversight
Commerce Dept’s Lutnick, Kessler under fire over inaction on Nvidia’s Megaspeed ‘spy’ fiasco
US Commerce Secretary Lutnick and Bureau of Industry and Security (BIS) head Kessler are under pressure from Congress and within the White House for failing to act against Chinese AI company Megaspeed, with bipartisan lawmakers demanding accountability and stronger AI chip export controls. A recently departed Commerce Department official said a rule requiring export licenses for advanced chips sold to some Southeast Asian countries was close to being issued in July 2025 and had been signed by all agencies, but never got past Lutnick; the official said that if implemented, it could have significantly weakened the ability of Southeast Asian companies such as Megaspeed to obtain Nvidia's advanced AI chips. Officials had previously found that Megaspeed imported 50,000 more chips than Nvidia traced to data centers in Singapore. According to Reuters, senior White House officials are weighing whether to ask Lutnick to step down; according to The Information, the Commerce Department is finalizing a rule extending export controls to seven Southeast Asian countries including Malaysia, Singapore and Thailand, and a BIS spokesperson said it is considering new rules targeting remote access with interagency partners.