House Democrats Open Second Nvidia Probe Over China Chip Sales

By Grace Kim

House Democrats opened a formal investigation Thursday into the Trump administration’s approval of Nvidia H200 sales to China, alleging a “scheme” built around a U.S. “security review,” a 25% tariff and re-export licenses.

It is the second congressional probe opened this week, after Republican-led committees on China, Foreign Affairs and Intelligence demanded Jensen Huang’s testimony.

Rep. Richard Neal (D-Mass.) and Sen. Ron Wyden (D-Ore.), the top Democrats on the House Ways and Means and Senate Finance committees, sent Commerce Secretary Howard Lutnick the letter.

What does the second probe allege?

Neal and Wyden demanded preservation of all records tied to H200 exports to Chinese buyers. They described three steps: chips manufactured in Taiwan would be shipped to the United States for a “security review,” assessed a 25% tariff under Section 232 of the Trade Expansion Act of 1962, then licensed for re-export to China by the Commerce Department.

The letter said Section 232 was designed to restrict imports that threaten national security.

“Congress wrote Section 232 to give the President a tool to take action against imports he has determined to pose a national security threat; Trump's use of the statute appears to have done the opposite, undermining U.S. national security and putting Americans at risk,” the lawmakers wrote.

The allegation is that the tariff mechanism bypassed the security review Congress intended.

What changed from the August 2025 deal?

That structure follows an August 2025 agreement in which Nvidia and AMD agreed to share 15% of their China chip revenue with the U.S. government in exchange for export licenses, the Associated Press reported at the time.

The Democrats asked why the administration moved from that revenue-sharing model to a tariff structure they view as an unconstitutional export tax.

The mechanism shifted from a 15% revenue share to the disputed tariff.

Why did Jensen Huang resign?

Nvidia confirmed Thursday that its board had accepted Huang’s resignation on Wednesday; the inquiry landed hours after the announcement. The 63-year-old co-founder and former CEO left after The New York Times reported a romantic relationship with Alice Huang.

Alice Huang is a Singapore-based executive at Megaspeed, which U.S. officials suspect of routing advanced Nvidia chips to China. She is alleged to be a Chinese intelligence asset and is not related to Jensen Huang.

The New York Times also reported two more alleged affairs: one with Kimberly Powell, Nvidia’s vice president of healthcare, who reports directly to the CEO, and another with an unnamed Nvidia employee.

In a letter to employees, Huang admitted infidelity but did not name Alice Huang, linking his conduct only to “national security concerns raised in news reports.”

Huang’s departure followed personal allegations that raised the national-security stakes.

How do exports connect to donations and security allegations?

The Democrats’ letter links the export approvals to political contributions. It says Nvidia and Huang donated at least $26 million to Trump’s pet projects, and the H200 deal was approved after Trump was briefed on Huang’s “compromised position.”

The New York Times reported that a secret Trump administration memo circulated in spring 2026, warning that Alice Huang was a spy for China’s Ministry of State Security. Secretary of State Marco Rubio supervised the memo’s drafting.

Trump was briefed on the surveillance findings in late 2025 but took no action, The New York Times reported.

Axios reported Wednesday that Trump ordered a crackdown last week on companies suspected of diverting Nvidia chips to China. Lutnick “stood in the way and at least slow-walked the order's execution,” Axios reported.

The letter cites another New York Times report that Commerce suspended its Megaspeed smuggling investigation after company outreach.

The inquiry tests whether political and personal considerations shaped the approvals.

How do the congressional inquiries differ?

The Republican-led panels have threatened to subpoena Huang. Rep. John Moolenaar chairs the House Select Committee on China, Rep. Brian Mast chairs House Foreign Affairs and Rep. Rick Crawford chairs House Intelligence.

On Thursday, Mast said Huang agreed to testify behind closed doors before Thanksgiving, with video recording and transcription expected.

Neal and Wyden, as minority members, can request documents and ask questions but cannot compel testimony or issue subpoenas. Their letter focuses on trade authority and Commerce’s vetting of Chinese buyers.

It cites a New York Times report that Commerce approved dozens of Chinese firms to handle H200 chips, some with ties to sanctioned entities, and “passed the probe off to the Department of Justice” without public confirmation.

Separately, Sens. Elizabeth Warren (D-Mass.) and Chris Coons (D-Del.) sent a preservation letter Wednesday to Howard Lutnick, Marco Rubio and White House Chief of Staff Stephen Miller.

They warned that Huang’s resignation “does not absolve him, other executives, or the company as a whole of responsibility for putting our national security at risk.”

The minority inquiry can seek records; the Republican-led panels have threatened subpoenas.

Who leads Nvidia after the resignation?

The White House said Thursday that Trump “maintains complete confidence” in Lutnick. Reuters reported that senior officials were discussing his future.

Nvidia shares fell more than 11% in premarket trading before paring losses. Nvidia named CFO Colette Kress interim CEO and appointed former Synopsys CEO Harvey Jones as its first-ever board chair.

Nvidia entered the probes with new leadership and a share-price decline.

What remains unresolved?

Five questions remain:

• Whether the Section 232 tariff mechanism was formally published or implemented through informal guidance.
• The full list of Chinese companies approved for H200 purchases and their ownership structures.
• Whether the Justice Department has assumed the Megaspeed investigation and its current status.
• The extent of Trump’s personal involvement in the export decisions versus delegation to Lutnick.
• What Huang will disclose in closed-door testimony and whether it becomes public.

The next tests are whether Huang’s recorded testimony is released and whether the government discloses how the Section 232 tariff and H200 licenses were handled.