US commerce secretary Howard Lutnick is facing mounting pressure over his apparent failure to act on the Nvidia scandal, with White House officials discussing whether he should be fired and other Trump administration figures publicly questioning his decisions. Scott Bessent, the US treasury secretary, blamed Lutnick's commerce department for the fact that the US had not imposed export restrictions on certain Nvidia chips destined for China. Bessent told CNBC that he has favoured adding Singapore-based Megaspeed, associated with an alleged Chinese spy, to Washington's blacklist of companies considered a national security risk, but said Lutnick's commerce department "has the pen" on the decision.
The scandal centres on Jensen Huang, who resigned from Nvidia on Thursday after reports emerged of multiple affairs, including one with Alice Huang, who is suspected of being a Chinese spy. Nvidia's chief financial officer, Colette Kress, replaced him on an interim basis. According to the Associated Press, a US intelligence report about Huang's relationship with the alleged spy circulated among senior Trump administration figures. Lutnick is facing particular criticism for a reported delay by his department in adding Megaspeed to the security blacklist, despite reported concerns within the administration. Megaspeed has purchased billions of dollars of Nvidia chips in recent years.
Lutnick is scheduled to testify before Congress next month, just days after the ousted Nvidia chief answers lawmakers' questions on Capitol Hill. Republican senator John Curtis said that the delay "raises the question of whether the commerce department is acting in the best interests of the American people". Republican senator John Cornyn told the Financial Times that there needed to be "a thorough investigation and accountability for the outrageous circumvention of national security export controls", adding: "Heads should roll." Senate Democratic leader Chuck Schumer said Jensen Huang and Nvidia must answer whether US security had been compromised, and called for the Trump administration to account for its actions once it learned of the relationship.
Scrutiny has also fallen on President Trump's close ties with Jensen Huang. According to the New York Times, Trump called Huang two days before he stepped down and urged him to fight for his job. Trump also personally invited Huang aboard Air Force One on a state visit to Beijing earlier this year. Republican Tim Scott, the Senate banking committee chair, said he had sent letters asking Lutnick and Huang to appear before him, citing "recent reports [that] raise serious concerns about our national security and the protection of sensitive US technology".
The scandal has refocused congressional attention on chip export controls to China. House speaker Mike Johnson said there was "now growing consensus in Congress on limiting chip exports to China", adding that he favoured restricting Beijing's access to advanced technology. Lawmakers are pressing their colleagues to pass at least four bills on chip exports. Meanwhile, Chinese AI companies are attempting to secure Nvidia chip capacity outside China amid concern that export control gaps may be closed, according to Reuters sources.