Scrutiny Mounts for Commerce Secretary Lutnick Amidst Nvidia Scandal and Huang's Departure

The White House has affirmed President Donald Trump's continued support for Howard Lutnick, the Commerce Secretary, who is facing significant criticism from Capitol Hill. This scrutiny stems from recent reports detailing alleged delays in actions to curb chip smuggling and concerns regarding the government's oversight of Nvidia chip exports to China. The New York Times reported that the Commerce Department failed to act against Megaspeed, a Singapore-based firm central to the scandal that precipitated Jensen Huang's resignation as CEO of Nvidia. Mr. Huang, who founded Nvidia in 1993, stepped down days after a report surfaced concerning an extramarital affair with Alice Huang, a Megaspeed executive suspected by US intelligence of being a Chinese agent. It is important to note that Jensen Huang and Alice Huang are not related, and the report of the affair predated his resignation.

Senator Elizabeth Warren, poised to chair the banking committee, stated, "Secretary Howard Lutnick and undersecretary Jeffrey Kessler must explain why they have not closed export control loopholes and act today to ensure our advanced technology is not fuelling China’s military." Similarly, Republican Senator John Kennedy has urged Mr. Lutnick to address questions regarding the approval of advanced chip sales to China.

A White House official commented that Mr. Trump "maintains complete confidence in the Secretary and his ability to carry out the position as the most transformative Commerce Secretary in modern history." The Commerce Department has not yet responded to requests for comment.

Democrats, having secured control of both chambers of Congress in the recent US midterm elections, are expected to intensify their examination of Mr. Lutnick's tenure. This includes investigating his connections to the cryptocurrency firm Tether and US-backed deals involving mining companies USA Rare Earth and Vulcan Elements.

The controversy surrounding Jensen Huang's affair has escalated into a political firestorm, particularly given his previous outspoken opposition to stringent US export controls on advanced chips destined for China. Tom Cotton, chairman of the Senate intelligence committee, has pressed Mr. Lutnick to restrict China's memory chip maker CXMT from the US market and impede its global market expansion, according to CNBC. The Commerce Department's last addition to its trade restriction list, the Entity List, was in October 2025. CXMT is currently on the Pentagon's 1260H list, identifying companies linked to China's military.

Congress is also exploring legislative measures for stricter chip controls. Senate minority leader Chuck Schumer has advocated for a bipartisan initiative to pass legislation, including the AI Overwatch Act, the Match Act, and the Chip Security Act, aiming to "cut off China's access to advanced American technology before it's too late." Mr. Schumer emphasized, "I’ve been saying it for years: our cutting-edge AI chips are too valuable to fall into the hands of potential adversaries."

Republican Representative Brian Mast, chairman of the House foreign affairs committee, announced that Jensen Huang is scheduled to testify before Congress this month, and Mr. Mast has not ruled out a public hearing. "Despite Jensen Huang’s resignation, Congress must demand answers from Mr. Huang and others at Nvidia about how they may have put US national security at risk," Mr. Schumer posted on X.

Nvidia is slated to release its quarterly earnings next week. The company's shares experienced a decline of 4.50 percent on Wednesday.