US Commerce Department Faces Scrutiny Over Nvidia Chip Diversions to China

The Trump administration's Commerce Department faces scrutiny over its handling of Singapore-based AI firm Megaspeed, suspected of diverting advanced Nvidia chips to China, amid revelations about former Nvidia CEO Jensen Huang's relationship with a Megaspeed executive. Commerce Secretary Howard Lutnick and aide Jeffrey Kessler face criticism for allegedly failing to act on intelligence. Investigators found Megaspeed imported about 50,000 more Nvidia chips than it could account for at Singapore data centers, with concerns circulating within Commerce as early as summer 2025. A proposed export-control rule that could have restricted Megaspeed's access was reportedly ready in July 2025 but never cleared Lutnick's desk, according to a former official. The controversy has drawn bipartisan criticism, with Republican Senator John Kennedy demanding explanations and Treasury Secretary Scott Bessent confronting Lutnick. Commerce is now working on a rule extending export controls to seven Southeast Asian countries to close loopholes, while Nvidia denies inappropriate interactions with officials.