There is broad agreement among most senior Trump administration officials that the United States should more aggressively tighten controls on Nvidia’s advanced chips to keep China from using them to catch up in the race to dominate artificial intelligence.
Then there is Howard Lutnick, who runs the Commerce Department.
Over the past year, Mr. Lutnick has frequently clashed with top officials over how to regulate sales of advanced technology, particularly Nvidia’s chip sales to Asia. That has drawn accusations from others in the administration and in Congress that the Commerce Department has become too cozy with Nvidia and its co-founder, Jensen Huang, and failed to adequately police the firm’s chip sales to China, in particular.
The issue has exploded into public view in recent weeks with the revelations from The New York Times that Nvidia’s chief executive, Jensen Huang, was in a relationship with a woman believed by U.S. intelligence agencies to be a Chinese spy. The woman, Alice Huang, was a top executive at a Singapore-based company, Megaspeed, that is suspected of smuggling Nvidia chips to China. On Thursday, Mr. Huang announced that he was stepping down from the company, sending the company’s shares tumbling.
The astonishing developments have thrust Mr. Lutnick into an uncomfortable spotlight and raised questions about whether he went too far in protecting Nvidia’s interests. And it has focused attention on whether the influence of Mr. Huang, an ally of President Trump’s and among the most high-profile and successful of American business leaders, kept the United States from moving faster to clamp down on sales of Nvidia chips to companies like Megaspeed.
The stakes in the A.I. race between the United States and China are high. China hawks warn that allowing sales of advanced chips to that country is speeding its A.I. development and giving it an economic and military edge. Those who support the sales say they help U.S. technology maintain global leadership, while deterring China from developing rival products. As the head of a sprawling department that has control over enforcing restrictions on technology sales, Mr. Lutnick is best positioned to single-handedly shape whether China has access to American technology, including Nvidia’s.
Within the Commerce Department, Nvidia is treated differently than other firms, current and former officials say, with its issues given high priority and sent through specific channels.
