Commerce Depts Lutnick, Kessler under fire over inaction on Nvidias Megaspeed spy fiasco

Howard Lutnick’s Commerce Department is facing major heat over its failure to crack down on Megaspeed – the Chinese AI firm at the center of the spy scandal that prompted Nvidia boss Jensen Huang’s shock resignation on Thursday.Huang was having an affair with alleged Chinese spy Alice Huang, an executive at Singapore-based Megaspeed, even as US officials investigated its role in smuggling Nvidia’s best AI chips to China.Last year, officials learned that Megaspeed had imported 50,000 more chips than what Nvidia officials found at its Singapore-based data centers.Rumblings on “bad findings about Megaspeed” swirled within the Commerce Department at least as far back as the summer of 2025, according to a recently departed former official at the agency who spoke to The Post on condition of anonymity.At the same time, Commerce Department staffers were separately working on a rule that would effectively undo a Biden-era rule on AI chip exports — which Nvidia and Lutnick both dismissed as too stifling — and add a new measure requiring export licenses for advanced chip sales to certain countries in Southeast Asia.

The ex-official said that rule was close to being published as of July of 2025 – but never got past Lutnick’s desk.The official said that the rule, if it had been implemented, would have “substantially mitigated” the ability of Megaspeed and other firms housed in Southeast Asia to obtain Nvidia’s advanced AI chips.Nvidia and Jensen Huang were vocal critics of China-focused curbs on chip sales.“There was a rule that was ready and all of the agencies had signed onto that rule,” the ex-Commerce Department official said.

“Lutnick refused to publish it.”As of Thursday afternoon, senior White House officials are weighing whether Lutnick should be forced out as Commerce secretary, Reuters reported, citing people familiar with the matter.A White House official defended Lutnick in a statement to The Post.“Secretary Lutnick is a champio...