Trump Authorized Action Against Nvidia Chip Diversions to China for at Least the Third Time
Key Facts
Axios reported that U.S. President Donald Trump authorized action on November 5 against companies suspected of diverting Nvidia chips to China, for at least the third time during the year. But the report said the decision had not been implemented at the time of publication, leaving the path to enforcing the restrictions unresolved. The agency cited sources as saying Treasury Secretary Scott Bessent pressed Commerce Secretary Howard Lutnick over his department’s resistance to imposing export controls. Reuters reported on November 11, citing the Axios report and senior sources, that Lutnick had slowed Trump’s campaign against companies suspected of diverting the chips. The issue centers on balancing efforts to prevent AI chips from reaching China against the risk of escalating trade tensions with it.
According to Axios, the meeting was held in the Situation Room on Thursday and was attended by Lutnick, Bessent, Defense Secretary Pete Hegseth and U.S. Trade Representative Jamieson Greer, along with Marco Rubio, the national security adviser and secretary of state. The agency said Bessent asked Lutnick why Megaspeed had not been added to the Entity List, describing the company as being at the center of an espionage scandal. It quoted a source briefed on the meeting as saying Bessent asked: "How is Megaspeed not on the Entity List?" Axios sources added that Lutnick first said he did not know, then said: "I’ll look into it." The agency reported that the group backed Bessent’s position on export controls, while the Commerce Department denied that the conversation had taken place as described.
Axios cited its sources as saying Lutnick asked for options to be prepared and brought back after Trump approved moving ahead with the action, and that implementation was still delayed when the report was published. It quoted one source as saying the response in the meeting was: "No, no, the decision has been made. Go execute it." The agency also attributed to Lutnick a warning during a discussion in the Oval Office that the restrictions "will start a trade war with China." By contrast, Commerce Department spokeswoman Kristin Eichheimer said the account of a confrontation was untrue, adding: "There was no such conversation between Secretary Bessent and Secretary Lutnick." The denial places Axios sources’ account of the discussion alongside the department’s official position, while the delay in implementing the decision remains central to the issue.
The dispute’s background, according to Axios, dates to pressure from White House and intelligence officials on Lutnick and his senior advisers to take action against Megaspeed beginning in the fall of 2025. The agency said they did not act before Bessent raised the issue at Thursday’s meeting. It also said, based on its review of the Federal Register, that the Commerce Department had not added any company to the Entity List in more than a year. The list is one tool for restricting transactions that require U.S. authorization, in the context of the case as described by the agency. The question raised within the administration therefore remained the company’s inclusion on the list and how to apply restrictions to chip diversion routes.
The discussion comes amid a licensing policy announced in January 2026, when the Commerce Department’s Bureau of Industry and Security said it would review export applications for Nvidia H200 and AMD MI325X chips to China on a case-by-case basis, subject to security requirements. In a filing with the U.S. Securities and Exchange Commission, Nvidia said new licensing requirements for H20 chips resulted in a cost of $4.5 billion in the first quarter of its fiscal 2026, related to excess inventory and purchase commitments. The company also said H200 shipments made under the new licensing program represented less than 1% of data-center revenue in the latest quarter at the time of the filing. These figures provide context on the effect of export controls on the company’s business, without determining the outcome of any new action concerning Megaspeed. In Congress, Senators Elizabeth Warren and Chris Coons on November 11 requested that all documents related to chip exports to China be preserved, along with a briefing on national security risks.
Nvidia closed at $166.19 on November 12, after closing at $173.73 the previous day, according to EL7 data. The two prices place the shares in consecutive-day context, without attributing either move to the dispute or any particular factor. The next step on the legislative path involves the Remote Access Security Act, which the House passed in January and which awaits consideration by the Senate, according to Reuters. The bill aims to regulate Chinese AI companies’ remote access to computing capacity in data centers outside China. House Speaker Mike Johnson said Thursday that consensus in Congress was growing in favor of imposing new restrictions on chip exports to China. At the same time, Axios quoted a White House official as saying Trump still had complete confidence in Lutnick and his ability to perform his job.