US President Donald Trump has greenlit a third enforcement action this year targeting companies suspected of illegally funneling Nvidia's advanced AI chips to China. This directive comes amid significant internal disagreements within his administration and allegations of espionage.
White House Divided on Export Controls
The latest crackdown was authorized after a high-level meeting in the White House Situation Room on November 12, followed by discussions in the Oval Office. Key officials present included US Treasury Secretary Scott Bessent, US Defence Secretary Pete Hegseth, US Trade Representative Jamieson Greer, and US Secretary of State and National Security Adviser Marco Rubio. Notably, Commerce Secretary Howard Lutnick has been a consistent point of contention, reportedly obstructing previous attempts to implement export restrictions.
During the meeting, Bessent pressed Lutnick on why the Commerce Department had repeatedly failed to act against firms like Megaspeed, suspected of illegally supplying Nvidia's AI chips to China. Lutnick's response, stating he needed to "check with the president" even after apparent agreement, fueled concerns among other officials about his commitment to enforcement.
Elon Musk's Input and Persistent Resistance
President Trump's decision to proceed with the crackdown reportedly included consultation with tech adviser Elon Musk, who supported the measures proposed by Bessent. Despite Trump's repeated approvals since May 2026, sources indicate continued resistance from Lutnick and Commerce Undersecretary Jeffrey Kessler, leading to implementation delays.
The urgency of these concerns has escalated following reports surrounding Nvidia CEO Jensen Huang's alleged affair with Alice Huang, a Megaspeed executive who is suspected of being a Chinese agent. This development adds a layer of espionage allegations to the already complex issue of illicit chip exports.
“The ongoing internal disputes and allegations of espionage highlight the significant challenges the US faces in enforcing its critical technology export controls.”
The US government initially imposed restrictions on advanced AI chip exports to China to prevent Beijing from leveraging such technology to enhance its AI and military capabilities. However, continued suspected exports suggest these restrictions may not be achieving their intended effect, prompting President Trump's intensified efforts.