Blumenthal Says Lutnick Must Go as Megaspeed Chip Scandal Reaches Commerce Department

The Connecticut Democrat wrote "Lutnick must go" in a social media post replying to a Fortune opinion piece, according to The Hill. The White House has not suggested it will act. It said President Donald Trump still "maintains complete confidence" in Lutnick, Newser reported.

Blumenthal's demand matters because Lutnick's department decides which companies can buy advanced American AI chips. Commerce issues export licences and keeps the entity list that cuts named companies off from US technology. The pressure on Lutnick is also coming from inside the administration. Reuters has reported that senior White House officials are weighing whether to remove him, according to Fortune.

The dispute centres on Megaspeed International, a Singapore-based company that became one of Nvidia's largest AI chip customers. It is run by Alice Huang, the woman at the centre of the scandal. The Justice Department is investigating Megaspeed for suspected breaches of US export controls. The Information has reported that Megaspeed and its Malaysian subsidiary, Speedmatric, shipped at least $7.5 billion of Nvidia chips to China over two years.

Treasury Secretary Scott Bessent has put the blame for the missing blacklisting on Commerce. "Treasury, War, USTR, and State were in favor of putting Megaspeed on the entity list for months," Bessent told CNBC on Friday, according to Fortune. "But Commerce has the pen." Asked about a reported confrontation, he said: "We don't repeat conversations in the Situation Room." Axios has reported that Bessent confronted Lutnick in the Situation Room after the midterm elections over the decision not to list Megaspeed.

The New York Times has reported that Commerce's Bureau of Industry and Security opened an investigation in 2024, under the Biden administration, into whether Nvidia chips sold to Megaspeed were diverted to China. The case was later "abruptly" handed to the Justice Department, according to The Week, which cited the Times. The Commerce Department has not added a company to the entity list since October 2025, The Week reported.

The Times also reported that when officials asked Oracle to cancel a $7 billion lease of chips to Tencent, Lutnick's deputy Jeff Kessler told them Lutnick had issues with a cancellation. The deal covered 100,000 advanced Nvidia AI chips. According to the same reporting, Lutnick argued that restrictions on China would stoke the trade war and insisted on raising Chinese access to US chips with Trump.

The criticism now crosses party lines. Republican Senator John Kennedy of Louisiana told Politico that Lutnick "needs to answer that in front of God and country," referring to the decision to sell advanced chips. Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, has called on Lutnick and Kessler to "explain why they have not closed export control loopholes," CBS News reported.

Lutnick's ties to Nvidia predate his time in government. Before Trump's second term, Cantor Fitzgerald, the firm Lutnick then ran as chairman and chief executive, held about $1.2 billion of Nvidia stock, according to securities filings cited by Fortune and The Week. Huang said in September 2025 that Lutnick was "the person I talk to most in the administration." Commerce and Nvidia did not immediately respond to Fortune's requests for comment.

Huang's resignation took effect this week, and Colette Kress is serving as interim chief executive, according to Nvidia's filing with the Securities and Exchange Commission. Lutnick has agreed to testify alongside Huang before the Senate Banking Committee on December 10. The hearing is expected to be the first time either man answers lawmakers' questions in public about Megaspeed.