Jensen Huang’s resignation on Thursday as Nvidia’s chief executive, following revelations of extramarital affairs with a subordinate and another with an alleged Chinese spy, is so much more than a sex scandal. The saga spotlights big gaps in America’s chip export controls and the excessive discretion U.S. government officials have over whether to seal them.
Huang’s Chinese paramour, Alice Huang (no relation), was an executive at Megaspeed, a Singapore-based company that acquired more than $4.6 billion in Nvidia hardware in less than three years. U.S. authorities have long suspected Megaspeed of diverting chips to China. The suspicions were aired in the press over a year ago. Both Megaspeed and Nvidia denied wrongdoing, with Nvidia insisting that its own inspections found no evidence of diversion.
Four federal departments — State, Defense, Energy and Treasury — supported blacklisting Megaspeed, but Commerce Secretary Howard Lutnick has been dragging his heels for months. Axios reported on Wednesday that several administration officials confronted Lutnick in the White House Situation Room last week, demanding he push through the restrictions, particularly on Megaspeed. When Lutnick argued that such a move could antagonize China, according to the report, they took the debate to the Oval Office, where President Donald Trump agreed for a third time that it should happen. (He had previously done so in May and August.) Out of the president’s earshot, however, Lutnick purportedly offered to “develop some options and come back.” Commerce denies this confrontation took place.
Much has been made of Huang’s advocacy against chip restrictions. Though his reckless liaison with an alleged Chinese asset undermines his credibility, the argument is not, in itself, suspicious. Long before he was first sighted with Alice Huang, he was making the case that excluding Nvidia from China would encourage the Chinese to develop domestic alternatives, undermining America’s technological advantage. That is, if not a wholly persuasive argument, at least a coherent one — even if it also serves Nvidia’s commercial interests. Jensen Huang was lobbying to help his company’s bottom line.
Senior government officials, however, have broader responsibilities than creating shareholder value. Even the biggest boosters of free trade acknowledge the need for exceptions. The United States would never sell missiles or fighter jets to its enemies, and the race to dominate the frontier of artificial intelligence is a defining security challenge of this era. China’s far-reaching espionage efforts show the lengths the regime will go to obtain the chips necessary to win.
The advanced chip export ban has been leaky since it was rolled out by President Joe Biden. Chips are tiny and easy to smuggle. Brokers, third-country intermediaries and overseas data centers make it difficult to establish where cutting-edge technology ultimately ends up. A 2024 investigation found that Chinese military-linked institutions were succeeding in procuring advanced Nvidia chips already barred from export.
The restrictions themselves proved easy to game. Nvidia developed modified chips for the Chinese market that complied with the letter of the initial restrictions, prompting the Biden administration to tighten the rules in 2023. All this makes the Megaspeed delay more troubling.
Lutnick has had no trouble invoking national security to defend tariffs on steel and aluminum from Canada. Why, then, is he apparently so reluctant to restrict a company suspected of diverting advanced American chips to China — surely a more fearsome adversary than our neighbor to the north? Adding a company to the federal blacklist is an interagency decision, not the Commerce secretary’s personal prerogative. If other departments favored action, what justified the delays?
Companies ought to compete under clear rules, not for the favor of whichever Cabinet secretary controls their licenses. Because export controls give politicians unusual power over private enterprise, predictable standards and consistent enforcement become vitally important. Anything less invites favoritism and regulatory capture.
Congress has a duty to demand answers, including a full accounting of Lutnick’s dealings with Nvidia. Cantor Fitzgerald, the firm he formerly ran and that his sons now lead, has disclosed substantial Nvidia holdings. That’s certainly not evidence of wrongdoing. But the Trump administration’s breathtakingly lax attitude toward conflicts of interest has come at a cost to public trust. And that bill is coming due.
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