Commerce Secretary Lutnick Was Warned About Nvidia's CEO and the Alleged Chinese Spy—And He Kept Approving Chip Sales

Commerce Secretary Lutnick Was Warned About Nvidia's CEO and the Alleged Chinese Spy—And He Kept Approving Chip Sales

**By [moonlight editory team| November 11, 2026 | 11-Minute Read**

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## The Short Version (For the Busy American)

The scandal surrounding Nvidia CEO Jensen Huang just reached the highest levels of the U.S. government, and the question it raises is far more serious than a personal affair.

According to reporting from Axios, Commerce Secretary **Howard Lutnick** received a **highly classified memo** warning him about Huang's relationship with **Alice Huang**, a woman U.S. intelligence believes is a Chinese intelligence agent. The memo was drafted under the supervision of Secretary of State **Marco Rubio** and circulated **before President Trump's May trip to China** .

Here's why it matters: **Lutnick oversees the agency responsible for keeping sensitive American technology out of the hands of adversaries.** And around the same time, his department was approving licenses for Chinese companies to buy advanced Nvidia chips .

**The punchline:** The warning was sent. The approvals continued. And nobody—not the Commerce Department, not the White House—has explained why.

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## What the Memo Actually Said

Let me walk you through the reporting, because the timeline is damning.

### The Warning

The classified memo, first reported by Axios and confirmed by multiple outlets, detailed Huang's relationship with Alice Huang, a former executive at Singapore-based **Megaspeed**. U.S. intelligence officials concluded she was working for China's Ministry of State Security .

The memo drew on **surveillance of Alice Huang** and a **chip-smuggling investigation** into Megaspeed—a company that purchased billions of dollars' worth of Nvidia chips and is accused of helping Chinese firms bypass U.S. export restrictions .

It circulated before Trump's **May 13-15 trip to China**, where Huang joined the presidential delegation .

### The Briefing on Air Force One

Rubio didn't just send a memo. He personally briefed Trump **aboard Air Force One** after learning that Huang would be joining the trip during a refueling stop in Alaska. Huang hadn't initially been invited—he was added at the last minute .

Trump's response, according to officials: he wasn't particularly influenced by the briefing and went ahead with the plan .

### The Denial

On Monday, Trump claimed he hadn't known about the relationship when he traveled to China. Asked if he had been briefed, he said: **"I'd certainly check with the intelligence people. They could have been mentioned. Certainly, it didn't make much of an impact on me"** .

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## The Commerce Department's Conflict

Here's where the story becomes more than a personal scandal.

### The Approvals

Lutnick's Commerce Department is the agency that grants licenses for exports of sensitive technology. Around the time the memo was circulating, the department **approved roughly ten Chinese companies to purchase Nvidia's H200 chips** .

Some of those licenses predated the memo. But the warning raises a fundamental question: **how did the department weigh the national security risk of Huang's relationship when it was clearing chip sales to China-affiliated entities?** .

### The Megaspeed Problem

The company at the center of the scandal—Megaspeed—was under investigation for chip smuggling. Its Malaysian sister company purchased at least **$4.8 billion** in Nvidia-based equipment in less than two years—a volume The New York Times described as **"unusual for a small, little-known company"** .

The Commerce Department has reportedly been **delaying attempts to blacklist Megaspeed**, according to Semafor .

### The Democratic Letter

Top Democrats on the House Foreign Affairs Committee have demanded answers from Lutnick, asking whether Commerce officials were aware of the intelligence linking Alice Huang to Chinese efforts to obtain Nvidia chips. They want to know by **December 1** .

Their letter was blunt: **"If Commerce was not briefed, we need to know why. If it was briefed, we need to know how it responded. And if the Department knowingly permitted these exports despite credible national-security concerns, the American people deserve an explanation"** .

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## The Human Touch: Why This Matters Beyond Washington

Let me put this in terms that actually connect to your portfolio and your country's security.

### Your 401(k) Is Watching Nvidia

If you own an S&P 500 index fund, Nvidia is one of your largest holdings. The stock has lost roughly **$1 trillion in market value** since the scandal broke—partly due to the affair, partly due to the broader AI selloff after the midterms .

The stock fell again on Monday as the board's investigation was announced. If the scandal escalates—if Congress uncovers evidence that Huang's relationship created a security vulnerability, or that Commerce knowingly approved risky chip sales—the political pressure on Nvidia will intensify. And that pressure could translate into stricter export controls, which would hurt Nvidia's business.

### The National Security Stakes

Nvidia's chips are the crown jewels of American AI dominance. They power the models that keep the U.S. ahead of China in the AI race. The entire export control regime exists to keep the most advanced chips out of Beijing's hands.

If the Commerce Department approved chip sales to companies linked to a suspected Chinese intelligence operation—even inadvertently—that's a **systemic failure**, not just a personal scandal. It means the guardrails designed to protect American technological advantage may have been compromised.

### The Political Fallout

The timing is brutal for Republicans. The memo was sent before the May China trip. The midterms were last week. And now, with Democrats set to take control of Congress in January, the investigation is about to get much more aggressive.

Congressman **Brian Mast**, the Republican chair of the House Foreign Affairs Committee, has already said he's prepared to **subpoena Huang** if he doesn't respond to a request for a closed-door briefing by Wednesday . Huang has been asked to appear on **November 18** .

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## Frequently Asked Questions

### What exactly was Lutnick warned about?

Commerce Secretary Howard Lutnick received a **highly classified memo** detailing Nvidia CEO Jensen Huang's relationship with **Alice Huang**, a woman U.S. intelligence believes is a Chinese intelligence agent. The memo drew on surveillance of Alice Huang and a chip-smuggling investigation into her company, Megaspeed .

### When was the warning sent?

The memo circulated **before President Trump's May 13-15 trip to China**. Secretary of State Marco Rubio also personally briefed Trump aboard Air Force One after learning Huang would join the delegation .

### Did Lutnick's department approve chip sales to China anyway?

**Yes.** Around the time the memo was circulating, Commerce approved roughly **ten Chinese companies** to purchase Nvidia's H200 chips. Some licenses predated the memo, but the warning raises questions about how the department weighed the national security risk .

### What is Megaspeed and why does it matter?

Megaspeed is a Singapore-based data center company that purchased billions of dollars' worth of Nvidia chips. Its Malaysian sister company bought at least **$4.8 billion** in Nvidia-based equipment in under two years—a volume The New York Times called unusual for a small company. U.S. authorities investigated whether it helped Chinese firms bypass export restrictions .

### Is the Commerce Department delaying action against Megaspeed?

**Reportedly, yes.** Semafor reported that the Commerce Department is **delaying attempts to blacklist Megaspeed** .

### What does Nvidia say?

Nvidia's board has launched an **independent investigation** into whether Huang was the target of a foreign intelligence effort. The board says it has **"no reason to believe"** that national security or Nvidia secrets were compromised. Huang has apologized for the affair and says he will cooperate fully .

### What happens next?

Huang has been asked to appear for a **closed-door briefing on November 18**. If he doesn't respond by Wednesday, Congressman Mast has said he's prepared to issue a **subpoena** . Democrats on the House Foreign Affairs Committee have demanded answers from Lutnick by **December 1** . And when Democrats take control of Congress in January, the investigation will likely expand.

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## The Path Forward: What to Watch

### Huang's Testimony (November 18)

The closed-door briefing will be the first time Huang faces Congress directly. What he says—and what he refuses to say—will shape the narrative.

### The Commerce Department's Response

Lutnick hasn't commented publicly on the memo. Watch for whether he provides a detailed explanation of the department's decision-making process on chip approvals—or whether he stonewalls.

### The Megaspeed Blacklisting

If Commerce moves to blacklist Megaspeed, it would be an admission that the company posed a risk. If it continues to delay, it raises questions about whether political considerations are overriding national security.

### The 2028 Fallout

This scandal is unfolding in the shadow of the 2028 presidential campaign. Trump's close relationship with Huang—and his administration's handling of the warning—will be scrutinized by Democrats and potentially by primary challengers. The question isn't just whether Nvidia's CEO survives. It's whether the president's judgment survives.

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## Conclusion: The Warning Nobody Acted On

Here's what I want you to take away from this story.

The U.S. intelligence community identified a potential national security risk. It drafted a classified memo. It sent that memo to the cabinet secretary responsible for protecting American technology. It briefed the president personally.

And then the chip approvals continued.

Maybe there's an innocent explanation. Maybe the licenses were for older chips, or the sales didn't materialize, or the intelligence wasn't conclusive. Maybe the Commerce Department had procedures in place that addressed the risk.

But nobody has explained any of that. And in the absence of an explanation, the American people are left with a simple, uncomfortable question: **Did the government know that Nvidia's CEO was compromised, and did it keep selling chips to China anyway?**

The answer will determine whether this is a story about a personal failing, or a story about a systemic one.

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## Disclaimer

This article is for informational purposes only and does not constitute financial advice, investment advice, or a recommendation to buy or sell any securities. The author is not a licensed financial advisor. All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Readers should conduct their own research and consult with a qualified financial professional before making any investment decisions. Data and figures cited are accurate as of the date of publication but may change. The author holds no position in any securities mentioned.

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