Nvidia scandal puts White House chip-export decisions under scrutiny

By Amara Osei

Since 2022, Washington has restricted exports of Nvidia’s most advanced AI processors to China over fears they could aid Beijing’s military and technological capabilities, according to BBC reporting. BBC described Nvidia’s chips as powering the AI revolution.

What did Lutnick decide about Megaspeed?

BBC reported that a highly classified memo shared with Commerce Secretary Howard Lutnick outlined concerns about Alice Huang and Megaspeed. Lutnick resisted taking action against the company, and that decision is now under scrutiny. His department controls exports of sensitive U.S. technology, BBC reported.

BBC reported that Huang’s resignation has not eased political pressure. Allegations about his reported affair with Alice Huang, a former Megaspeed executive with no family relation to him, have raised the possibility of a foreign intelligence operation targeting someone with unusually close presidential access.

BBC reported that U.S. intelligence suspects Alice Huang of links to Chinese intelligence, while Beijing has rejected the allegations. Nvidia’s board says it has no reason to believe company secrets or national security were compromised.

How close was Huang to Trump?

BBC reported that Huang was among the few business leaders with direct access to President Donald Trump. He met Trump repeatedly, traveled with him to Britain and joined him aboard Air Force One for the China trip in May. Huang had become an important voice in one of the administration’s biggest debates: how much of America’s most advanced technology should reach China.

BBC reported that export controls remain difficult to enforce because chips bought legally in Singapore and Malaysia can be diverted to China. Chinese companies can also rent access to computing power through data centers outside China. Huang argued that restrictions shut Nvidia out of a huge market and encouraged Chinese firms to develop their own alternatives.

Trump appeared sympathetic to Huang’s position, BBC reported, allowing Nvidia to resume sales of certain chips to China last year in return for a share of the revenue. The most advanced Blackwell chips remain off limits.

Why did the Megaspeed inquiry stop?

Lutnick’s department had been pressed to act on concerns that Singapore-based Nvidia customer Megaspeed was helping divert advanced chips to China, BBC reported. Megaspeed had co-operated with Commerce Department inspections, BBC reported.

On Thursday, Megaspeed chief executive Tan Yong Pong, also known as James Tan, said the company “takes its compliance obligations under US export control laws extremely seriously.” He added that Megaspeed is “committed to working constructively and transparently with the US government.”

Other senior officials wanted a tougher response, BBC reported. Treasury Secretary Scott Bessent was among those who reportedly questioned why Megaspeed had not been placed on the Commerce Department’s blacklist.

BBC reported that questions arose over why the Megaspeed investigation stopped after Nvidia intervened. The New York Times reported that Nvidia’s general counsel contacted Commerce Department investigators probing suspected chip smuggling by Megaspeed and invoked a senior Trump appointee. The department allegedly froze the investigation and handed the case to the Justice Department.

BBC said the episode apparently highlighted a significant disagreement over Trump’s China policy. Huang wanted access to the Chinese market, other officials were reportedly worried about national-security consequences, and Lutnick was caught in the middle.

What is driving congressional pressure?

Members of Congress from both parties want answers, BBC reported. Democrats have launched an investigation into how the Commerce Department vetted Chinese companies approved to buy AI chips, while Republicans are also questioning the administration’s approach.

Republican representative John Moolenaar, who chairs the House Select Committee on China, said it was in the national interest for Nvidia and other American AI firms to succeed. He warned that companies should never jeopardize the nation’s security by giving Chinese firms access to their most advanced chips.

Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, said Huang’s resignation did not absolve him of responsibility. She urged Lutnick to explain why export-control loopholes remain open. Huang’s team told Republican lawmakers on Wednesday that he plans to cooperate with their request to testify behind closed doors.

What did the White House know?

The White House has not responded to the BBC’s request for comment. It told the New York Post that Trump has complete confidence in Lutnick, describing him as “the most transformative commerce secretary in modern history.” The backing comes amid reports that officials are weighing whether Lutnick should be forced out.

BBC said it had contacted the Commerce Department for comment. The New York Times reported that Trump was briefed on the intelligence concerns and directly involved in decisions about chip sales to China. BBC said Trump cultivated the close relationship with Huang, whose personal life may have triggered a crisis reaching the White House itself.

The next pressure points are Huang’s closed-door testimony and whether officials move to remove Lutnick. Disclosure of the classified memo could clarify how much Trump knew before Commerce allegedly froze the Megaspeed inquiry.