Howard Lutnick Took Softer Line on Nvidia as Calls for Tougher Controls Grew

Detailed summary

Critics say Howard Lutnick, the commerce secretary, and his department have shielded Nvidia as concerns have grown over A.I. chip sales to firms like Megaspeed.

Howard Lutnick has frequently clashed with top officials over how to regulate sales of advanced technology to Asia, particularly Nvidia’s chip sales in the region.Credit...Doug Mills/The New York Times

Ana Swanson, Maggie Haberman and Jonathan Swan reported from Washington, and Tripp Mickle from San Francisco.

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.

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…

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