Democrats on Thursday opened an inquiry into how the Trump administration handled Nvidia’s chip sales to China. Earlier on Thursday, the company ousted its CEO Jensen Huang. He also agreed to testify to a different set of Republican-led Congressional committees.
Huang was removed from the company he founded after he confessed to an extramarital affair amid reports of a relationship with a woman accused of being a Chinese spy. (He has since been accused of having more affairs, with Nvidia employees.)
The alleged Chinese spy, Alice Huang, was an executive of Nvidia customer Megaspeed, a Singapore-based company that U.S. officials suspect of helping route advanced Nvidia chips into China. The Democratic inquiry comes from Rep. Richard Neal (D-Mass.), the top Democrat on the House Ways and Means Committee, and Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee. As the minority party, they can ask questions but can’t compel answers.
Their humdinger of a letter to Commerce Secretary Howard Lutnick asks the department to preserve records about an arrangement they find questionable and, they allege, illegal.
“The scheme worked like this,” as the letter describes it. President Trump agreed to sales of Nvidia’s H200 chips to China as long as the chips, manufactured by Taiwan, were first shipped to the United States. On arriving, Trump added a tariff “effectively taking a cut of Nvidia’s sales to China through what appears to be an unconstitutional export tax system,” the letter said. Then the Commerce Department, under Lutnick, issued an export license.
But the letter questions why Lutnick continued to allow Megaspeed to buy chips even after he was reportedly informed by US intelligence of their suspicions of Alice Huang and of Jensen Huang’s relationship with her. It questionswhy the department reportedly green-lit other Asian companies to buy Nvidia chips “with no physical presence at their listed addresses.” So the inquiry is aimed at the administration, not just Nvidia and Huang.
The letter also questions how Nvidia’s donations to Trump’s projects factored in. It notes that the export deal was approved after Trump learned of “Mr. Huang’s compromised position” in sleeping with an alleged spy, and after Nvidia donated $26 million toward Trump’s projects, including the ballroom. It appears to be asking if Trump used his knowledge of the affair to secure donations from Nvidia.
Interestingly, in a “60 Minutes” interview with President Trump that aired on Sunday, he mentioned how he and his team had threatened an unnamed AI exec with jail, and after that, the exec “totally changed.”
This Congressional investigation into Nvidia’s China sales and its dealings with Trump is the second one, so far, since news of the alleged spy affair broke. The Republican-led group involves leaders from the House Select Committee on the Chinese Communist Party, the House Committee on Foreign Affairs, and the House Intelligence Committee. That group has demanded that Huang come to them and testify in a closed-door session. They had threatened to subpoena him if he didn’t voluntarily agree. On Thursday, after his resignation, he agreed.
