The fallout of Jensen Huang’s downfall expanded into a public fight between two of President Trump’s top advisers. Treasury Secretary Scott Bessent accused Commerce Secretary Howard Lutnick of failing to prevent China from obtaining Nvidia’s most advanced chips. Nick Schifrin looks at the finger-pointing and the ongoing efforts to control advanced technology exports to China.

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Amna Nawaz:

Today, the fallout of Nvidia CEO Jensen Huang's downfall expanded into a public fight between two of President Trump's top advisers.

The treasury secretary accused the commerce secretary of failing to prevent China from obtaining Nvidia's most advanced chips. Former Nvidia CEO Jensen Huang played an outsized role in President Trump's technology policy.

Nick Schifrin looks at today's finger-pointing and the ongoing efforts to control advanced technology exports to China.

Jensen Huang:

Here it is, our brand-new GeForce RTX 50 Series Blackwell architecture.

Nick Schifrin:

They're the American chips powering the AI revolution. And, for years, Jensen Huang wanted them sold to China.

Woman:

Jensen, how do you like China?

Jensen Huang:

I love China.

Nick Schifrin:

And Huang had an administration ally.

Jensen Huang:

Howard is the person I talked to most in the administration.

Nick Schifrin:

Commerce Secretary Howard Lutnick, whose agency controls the entity list of countries and companies banned from buying U.S. technology.

Howard Lutnick:

We want to keep having the Chinese use the American technology stack.

Nick Schifrin:

Last year, Commerce and the Trump administration decided to let China buy some less advanced Nvidia chips. But international companies believed to collaborate with Beijing, including the Singapore-based Megaspeed, the company whose leader Huang had an affair with, reportedly gave China access to the most advanced chips.

And, today, Lutnick was accused of looking the other way.

Scott Bessent:

Treasury, War, USTR, and State, they were in favor of putting Megaspeed on the entity list for months. But Commerce has the pen.

Nick Schifrin:

Today, on CNBC, Treasury Secretary Scott Bessent blamed the Commerce Department for not implementing the U.S.' export blocks on Nvidia's most advanced chips.

Scott Bessent:

I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H100s. And so any leakage is very frustrating because it hurts the -- our -- hurts our great companies in the AI race, gives the Chinese an advantage.

Chris McGuire, Council on Foreign Relations: If we did prevent them from getting these chips, they actually would be, instead of months behind us in AI, they would be years behind us in AI.

Nick Schifrin:

Chris McGuire is a senior fellow on the council of foreign relations and was the director of technology on President Biden's National Security Council staff. He says the effort to restrict Chinese access to chips began when the first Trump administration blocked the Chinese telecommunications giant Huawei from buying semiconductors with U.S. technology.

The U.S. realized the export restrictions were some of the best ways to constrain Chinese military and AI advancements, so they continued into the Biden administration. And, in early 2025, the Biden team pushed through new regulations that required most foreign companies to get Commerce Department permission to buy advanced chips.

Chris McGuire:

It was slated to go into effect in May 2025, but two days before it went into effect, the Commerce Department said they're not enforcing it.

If the Commerce Department had enforced this, Megaspeed would not have been able to get chips unless the U.S. government green-lighted it. But because they didn't enforce it, Megaspeed could just buy whatever they wanted completely uninterrupted.

Nick Schifrin:

Today, Bessent also blamed Nvidia for selling to Megaspeed.

Scott Bessent:

Did Nvidia know their client? And was there a robust effort at Nvidia to make sure that there was no leakage and that they were selling to what were obviously pass-through shell companies?

Nick Schifrin:

But it was Huang, who is a celebrity in China, who helped push President Trump to allow the sale of U.S. chips to China in the first place.

Jensen Huang:

Why is it that we don't come up with a regulation that's more balanced so that Nvidia can win around the world, instead of giving up the world? We want United States to win at every single layer, including the chip layer. And conceding the entire market is not going to allow the United States to win the technology race long term.

Chris McGuire:

Well, Jensen certainly wins if they if they sell chips to China, but I would argue America does not win.

Nick Schifrin:

In fact, independent researchers this week discovered that China's AI models were all developed thanks to smuggled Nvidia advanced chips.

Chris McGuire:

While I think the poor implementation on export controls has probably cost us years of advantage, we still -- doubling down now will still give us years, even potentially decades of advantage in the future, as long as we actually manage it right. But if we don't, China is going to stay close and that will have catastrophic impacts for U.S. national security.

Nick Schifrin:

There's a debate over that, which will continue. But Jensen Huang's departure will empower advocates of stricter export controls, including a push on Capitol Hill to further restrict the world's leading technology from going to the U.S.' chief international competitor.

For the "PBS News Hour," I'm Nick Schifrin.