Sen. Jim Banks (R-IN) is demanding answers from Commerce Secretary Howard Lutnick following explosive allegations that the Commerce Department allowed critical American artificial intelligence technology to reach Chinese companies through regulatory loopholes, despite President Trump’s efforts to tighten national security restrictions.

According to Fox News’ Bill Melugin, Banks called for Lutnick to appear before the Senate Banking Committee and explain what happened.

Melugin wrote:

“Sen. Jim Banks (R-IN) says on @FoxNews he wants Commerce Secretary Howard Lutnick to come in and testify before the Senate Banking Commitee because “it appears Lutnick used loopholes to allow chip sales to China to occur” in defiance of President Trump’s export controls and “we have a lot of bipartisan questions and concerns about what happened.””

According to Banks, it appears that Lutnick used loopholes that permitted chip sales to China despite Trump’s export-control directives.

“We have a lot of bipartisan questions and concerns about what happened,” Banks said.

According to an explosive Axios investigation published Wednesday, Trump repeatedly authorized stronger measures against companies suspected of diverting advanced Nvidia AI chips to China.

But Lutnick allegedly resisted implementing those restrictions.

The report, based on interviews with six senior sources familiar with administration discussions, claims President Trump backed action against suspected chip diversion on three occasions, in May, August, and November. Yet the Commerce Department reportedly failed to follow through.

During a Situation Room meeting, Treasury Secretary Scott Bessent confronted Lutnick over the resistance, particularly regarding Singapore-based Megaspeed, a firm that has purchased billions in Nvidia AI chips and sits at the center of espionage concerns. Other senior officials, including Defense Secretary Pete Hegseth and Secretary of State Marco Rubio, sided with Bessent. Lutnick reportedly agreed but later delayed implementation.

According to Axios, Bessent confronted Lutnick over the department’s reluctance to impose additional restrictions on companies suspected of helping China obtain advanced chips.

The Axios account further described Trump consulting Elon Musk before directing that the controls move forward, only for post-meeting resistance to continue.

The Commerce Department disputed key elements of the Axios account, including the reported confrontation between Bessent and Lutnick.

These allegations have not been independently established, but they are now fueling demands for congressional oversight.

Banks has long pushed to lock in Trump’s America First technology policy. He authored the AI OVERWATCH Act, which codifies prohibitions on exporting the most advanced AI chips to countries of concern, requires licenses, and prioritizes American customers and allies.

The measure has bipartisan support (including from Sen. Elizabeth Warren) and was secured in the Senate’s National Defense Authorization Act framework. Banks has repeatedly warned that America’s most powerful AI chips are “the crown jewels of American power” and cannot be allowed to strengthen the Chinese military.

Other Republicans, including Sen. John Kennedy (R-LA), have also demanded Lutnick explain the decisions “in front of God and country,” while Sen. Tom Cotton has pressed to add Chinese memory chipmakers to the Entity List.

Democrats on the Banking and Finance committees have sought document preservation and answers on approvals involving firms with ties to the Chinese government and military.

The post Sen. Jim Banks Demands Commerce Secretary Howard Lutnick Testify: “It Appears Lutnick Used Loopholes to Allow Chip Sales to China” in Defiance of President Trump’s Orders appeared first on The Gateway Pundit.