US Commerce Secretary Howard Lutnick has repeatedly held up President Donald Trump's crackdown on companies suspected of diverting Nvidia's AI chips to China, Axios reported on Wednesday, citing high-level sources. The report exposes a split inside the administration over how aggressively to enforce export controls, and it lands while Nvidia is already facing heavy China-related scrutiny of its own.

The White House wants to crack down on Nvidia chips leaking into China, but the department meant to enforce the rules is reportedly the one holding things up. The crackdown targets companies suspected of routing Nvidia's advanced processors into China through intermediaries despite US export restrictions.

According to Axios, Trump authorized the crackdown last Thursday after consulting Elon Musk — the third time this year he has done so. The same day, Lutnick met in the Situation Room with Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth, Trade Representative Jamieson Greer and Secretary of State Marco Rubio. Bessent challenged Lutnick over his department's resistance to carrying out the controls. Lutnick appeared to agree but said he needed to check with Trump first, the report said.

Why Commerce holds the keys

Lutnick's role matters because enforcement sits with the Commerce Department's Bureau of Industry and Security, which licenses chip exports and polices diversion. A delay at Commerce can slow enforcement even after the White House has signed off. The US has restricted exports of Nvidia's most advanced AI processors to China since 2022, tightening the rules in successive rounds; Nvidia has sold China-market chips built to comply with earlier restrictions — such as the H20, which itself became subject to US licensing requirements in April 2025. Enforcement has therefore focused heavily on third-country intermediaries that could funnel restricted products into China.

Diversion usually happens through buyers in third countries, often in Southeast Asian hubs such as Singapore, who resell restricted chips into China. Singapore's government has previously said it would investigate reports that restricted Nvidia chips were routed through the city-state, and has stressed that companies operating there must comply with US export controls. In June, the bureau moved to close a loophole that may have let overseas units of Chinese companies obtain top-end Nvidia processors, according to Reuters.

Awkward timing for Nvidia

The report comes days after Nvidia's board opened an independent investigation into reports that chief executive Jensen Huang had been the target of a foreign intelligence effort. The probe was announced on November 8 and is being led by independent directors with help from outside counsel. The board said it has no reason to believe national security or company secrets were compromised, and that it still has confidence in Huang.

The New York Times reported that Megaspeed, a Singapore-based firm, bought about $4.8 billion of Nvidia chips over two years, although no wrongdoing by the company has been established. Nvidia's own filings have noted that revenue attributed to Singapore reflects where customers are billed rather than where chips are ultimately shipped. Nvidia shares fell about 4% on November 9, the first trading session after the board's announcement.

Adding to the pressure, three Republican House committee chairs have reportedly asked for a closed-door briefing with Huang on November 18.

Market backdrop

For Nvidia, the dispute adds another layer of policy uncertainty to a week already dominated by its board's probe, and it keeps China-linked headline risk high heading into the requested House briefing. If enforcement tightens, it could weigh on sales routed through third-country buyers in Southeast Asia, although sales made through those channels are hard to size from public data.

Nvidia is one of the heaviest weights in the S&P 500, so stock-specific shocks can move the wider index even when most other stocks are rising. Wall Street rebounded on Monday after the prior week's selloff in AI stocks, but Nvidia fell — a sign that its own risks are now partly separate from the wider AI trade.

A visible split between Bessent and Lutnick also matters beyond chips, because it raises questions about how consistently trade and export policy toward China will be applied.

For investors, the question is whether the Lutnick dispute ends in tougher, faster enforcement or a quieter compromise. Either way, Washington is now testing Nvidia's China exposure from several directions at once.

Related commentary

Among related commentary published alongside the report, Mizuho's Klein called Nvidia "silly cheap" below 10 times earnings despite the uncertainty around Huang, while Morgans' Stickley noted that the S&P 500 has been up after every US midterm election since 1950 as Nvidia looks cheap.

Earnings next

Nvidia reports on Tuesday, 17 November, after the US close. The company will host a conference call on Tuesday, November 17, at 2 p.m. PT (5 p.m. ET) — 22:00 GMT — to discuss its financial results for the third quarter of fiscal year 2027, which ended October 25, 2026. Ahead of the call, Nvidia will provide written commentary from the CFO.