Scoop: Commerce's Lutnick was sent warning on Nvidia CEO affair
Add Axios as your preferred source to
see more of our stories on Google.
Nvidia CEO Jensen Huang (left) and Commerce Secretary Howard Lutnick at the G20 Innovation Ministerial in Chapel Hill, N.C., on Sept. 2. Photo: Cornell Watson/Bloomberg via Getty Images
Commerce Secretary Howard Lutnick was sent a highly classified memo warning about Nvidia CEO Jensen Huang's relationship with suspected Chinese spy Alice Huang, multiple sources familiar told Axios.
Why it matters: Lutnick oversees the agency charged with keeping sensitive U.S. technology out of the hands of American adversaries. The warning raises questions about how the department weighed potential security risks as it cleared advanced Nvidia chip sales to China-affiliated entities.
Driving the news: Secretary of State Marco Rubio oversaw the drafting of the memo detailing Huang's relationship with Alice Huang, who U.S. intelligence officials believe is a Chinese intelligence agent, according to The New York Times.
- The memo, which drew on surveillance of Alice Huang and a chip-smuggling investigation into her company, Megaspeed, circulated before President Trump's May 13–15 trip to China.
- Rubio also warned Trump directly aboard Air Force One before a refueling stop in Anchorage where Jensen Huang joined the delegation. He hadn't initially been invited to participate, the Times reported Tuesday.
- On May 14, Reuters reported that the Commerce Department had cleared around 10 Chinese companies to purchase Nvidia's H200 chips.
- Some export approvals predated the warning. Nvidia disclosed in February it had received an H200 export license, and Huang told Axios' Ina Fried in March the company had licenses covering Chinese customers.
Yes, but: It's unclear how those approvals ultimately translated into sales, as China's government has halted some chip-buying activity in spite of U.S. approvals.
- Megaspeed purchased billions of dollars' worth of Nvidia chips, according to multiple media outlets.
What they're saying: Trump said on Monday that it was possible intelligence officials had shown it to him, but he didn't recall: "Certainly, it didn't make much of an impact on me."
- The Commerce Department did not comment.
Catch up quick: Nvidia has been rocked by the scandal, losing about $1 trillion in market value since the Times' first reported the relationship, although some of that decline also came after an overwhelming number of Democrats promising to slow an AI data-center buildout were elected in the midterms.
- Huang acknowledged an affair Sunday, and Nvidia's board announced an independent investigation. The board expressed confidence in his leadership and said it had no reason to believe national security secrets were compromised.
What to watch: New revelations continue to drop almost daily about the administration's handling of the Nvidia CEO's relationship. Lawmakers in both parties have promised investigations and demanded more information, including closed-door testimony from Jensen Huang next week.
- Top Democrats on the House Foreign Affairs committee have also demanded answers from Lutnick about the administration's chip approvals, "including to companies with concerning links to China and amid alarming reports of potential Chinese intelligence ties to Nvidia CEO Jensen Huang."
