Nvidia crisis spurs scrutiny of US agency that oversees chip curbs

• US export control agency BIS is under fresh scrutiny after Nvidia’s Jensen Huang was considered for a conference speaker role, raising questions about its ties to chipmakers and China policy.
• Congress is pressing Jeffrey Kessler and Howard Lutnick over Nvidia decisions, alleged poor transparency, staff shortages, and claims that BIS mishandled export controls on advanced AI chips.
• The scandal has widened calls for tougher export laws, after Nvidia’s H200 sales to China and a BIS rule gap raised fears that Chinese firms could still get cutting-edge chips.

WASHINGTON - The Trump administration official who runs US export control programmes was looking for marquee names for his agency’s upcoming annual conference and threw an unusual option into the mix: Nvidia Chief Executive Officer Jensen Huang.

Under Secretary of Commerce Jeffrey Kessler had expressed interest in recent months in inviting Huang to be a speaker at the Bureau of Industry and Security event on Jan 10 in Washington, according to people familiar with the matter who asked not to be identified discussing private deliberations. 

Kessler bragged about his ability to get Huang to attend, the people said, though the then-Nvidia chief ultimately fell out of the running. A BIS spokesperson said no speakers have been invited to the conference yet and planning is still underway.

Even considering Huang as a possible speaker was unusual because BIS regulates exports of Nvidia’s prized artificial intelligence chips and company executives rarely headline such events, the people said. There’s also the fact that Nvidia, one of the highest-profile subjects of BIS regulations, has vehemently opposed strict limits on selling advanced chips to Chinese customers.

In the wake of Huang’s abrupt downfall as CEO of the chipmaker he founded more than three decades ago, Kessler and his agency are coming under fresh scrutiny for their handling of export restrictions. Congress is demanding answers about whether BIS and the Commerce Department did enough to keep Nvidia’s AI processors out of China’s hands as well as the degree to which Silicon Valley leaders like Jensen Huang may have influenced policy.

“BIS sits at the intersection of America’s leading edge innovation and our need to protect against our adversaries stealing that innovation or using it against us,” said Christopher Padilla, who served as Assistant Secretary of Commerce for Export Administration during the Bush administration. “They are the tip of the spear for that.” 

Lawmakers are seizing on the revelations to press Kessler and Commerce Secretary Howard Lutnick to explain their decisions related to Nvidia. House Republican Foreign Affairs Committee Chairman Brian Mast has asked that Kessler appear before his panel on Dec 3, while Lutnick has received a request to appear before the Senate Banking Committee on Dec 10. 

The scandal has fuelled a bipartisan push to pass export controls legislation before year’s end.

Huang’s departure was prompted by his admission that he’d had an affair with a woman suspected by US officials of spying for China and the company she led, Megaspeed, had been under investigation by Commerce for possible export control violations. Megaspeed has denied any wrongdoing, while the former Nvidia chief’s romantic partner, Alice Huang, is now in China.

At the centre of the mushrooming controversy is BIS, a small yet powerful agency that sets export control policy and enforces US restrictions. Kessler has led the bureau since early 2025, navigating between pressure from advocates of a tougher stance toward China and President Donald Trump’s desire to significantly boost global sales of American AI chips.

The people familiar with the matter described mismanagement and a lack of transparency around policy decisions under Kessler, with staff members siloed from their interagency counterparts and industry stakeholders.

On top of that is a questionable relationship between Lutnick and Kessler: one witness described instances where Lutnick screamed at Kessler in front of staff. The office has also faced a brain drain of experienced career staff over the past two years, which has led to bottlenecks and frustration, the people said. 

The BIS spokesperson challenged those characterisations, saying it’s normal to control the flow of information in a national security context and that Kessler and Lutnick have a strong working relationship. The account of a shouting match is baseless gossip, the spokesperson said. Spokespeople for the Commerce Department didn’t respond to a request for comment. 

Kessler’s desire to have Huang at the January event underscored the dissonance that has beset the office.

The conference is set to have a Golden Age theme, styled after a phrase frequently used by Trump, according to the people familiar with the matter. That’s in contrast to its normally staid agenda, which features BIS officials and policy geeks attending days of speeches and round tables on the latest regulations and enforcement actions.

Kessler’s consideration of Huang for a speaking role also followed Nvidia’s intervention in 2025 in a BIS probe of Megaspeed. In late summer 2025, Nvidia General Counsel Tim Teter called Kessler to ask whether BIS was involved in the Singapore government’s recent detention of Alice Huang, Bloomberg News reported this week. BIS was not involved in that action, Bloomberg reported, citing people familiar with the matter.

An Nvidia spokesperson has said that Teter was unaware of the affair at the time he called Kessler about Alice Huang’s detention in Singapore. But in the weeks following the call, BIS staff were muzzled in their ability to investigate the company, including a mandate that they route all request of Nvidia through Kessler, Bloomberg reported.

It remains unclear exactly where Kessler stands on Nvidia and Jensen Huang following the scandal, but previously, he was eager to foster a relationship with the then-CEO, taking cues from Lutnick and also from Trump, who had befriended Huang and praised his company, Bloomberg has reported.

Kessler’s agency carried out Trump’s decision in late 2025 to allow shipments of Nvidia’s H200 semiconductors to China, a move that prompted bipartisan backlash over concerns that giving Chinese firms access to advanced chips would boost their development of AI models. BIS is responsible for licensing H200 chip purchases by individual entities in China, and under the arrangement the US government receives a 25% cut of the revenue.

BIS also said in May 2025 that it wouldn’t enforce a regulation adopted in the Biden administration’s final days that was intended to restrict the ability of China and other US adversaries to acquire cutting-edge semiconductors by giving the closest US allies access to advanced GPUs while limiting access to other countries.

While BIS has promised a replacement, it has yet to introduce one, creating what some see as a loophole that may have allowed Chinese headquartered companies outside of China to purchase advanced chips. BLOOMBERG