Lutnick should have stopped sensitive Nvidia AI chips from being diverted to China, critics charge

Commerce Secretary Howard Lutnick is under fire over whether his ties to Chinese companies and friendship with ousted Nvidia CEO Jensen Huang contributed to the federal agency’s lack of oversight of billions in Nvidia AI chip sales, CBS has learned.

Before President Trump appointed Lutnick to head the Commerce Department, Lutnick was chairman and CEO of Cantor Fitzgerald, a New York investment bank that held approximately $1.2 billion in Nvidia stock at the time.

Lutnick developed a warm relationship with Huang, who resigned Thursday as reports of a growing number of cases sparked new uncertainty about the world’s leading maker of AI chips. One of Huang’s alleged relationships was with Alice Huang (no relation to Jensen Huang), whom the United States considers to be a Chinese spy. She led Megaspeed International, a Singapore-based company that became one of Nvidia’s biggest customers for AI chips and is suspected of illegally shipping Nvidia’s most advanced AI chips to Chinese entities, circumventing a US ban.

As Commerce Secretary, Lutnick took the helm of an agency charged with controlling exports of sensitive technology to global adversaries and rivals.

One way the Commerce Department keeps this information and technology out of the hands of China and other adversaries is by listing foreign companies and individuals on its entity list. This restricts their ability to access U.S. technology products, and inclusion on the list means that the department believes there is a risk that the entity may be involved in activities contrary to the national security or foreign policy interests of the United States.

In 2024, under the Biden administration, the Commerce Department’s Bureau of Industry and Security launched an investigation into Nvidia’s chip sales to Megaspeed to determine whether they were being redirected to China. But according to the New York Times, the investigation was abruptly transferred to the Justice Department. The Justice Department had no comment on the investigation.

The Department of Commerce has not added any companies to the Entity List since October 2025.

Last week, Treasury Secretary Scott Bessent confronted Lutnick about the Commerce Department’s failure to place Megaspeed on the Entity List, Axios reported.

Chris McGuire, an expert on China and emerging technologies at the Council on Foreign Relations, said: “The real scandal here is the lack of enforcement of export controls. »

He said the Commerce Department knew for a year that Megaspeed was run by a woman the U.S. believes was a Chinese spy, “and they did nothing.” The New York Times reported that about a year ago, President Trump was briefed on intelligence suggesting that Alice Huang was a Chinese asset and that she had grown close to Jensen Huang.

“Either Lutnick doesn’t know how to do his job or he’s protecting Huang,” McGuire said.

The Commerce Department did not respond to a request for comment.

Thursday, after Jensen Huang’s resignation became public, Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee, called on Lutnick and his deputy, Jeffrey Kessler, to “explain why they have not closed the loopholes in export controls.” Kessler is the deputy secretary who led the Commerce Department’s investigation into Megaspeed.

Warren urged the two men to “act today to ensure our cutting-edge technology does not fuel China’s military.” In March, Warren wrote to Lutnick demanding the “immediate suspension” of all Nvidia chip export licenses to China.

Questions about Lutnick’s dealings with Chinese state-owned companies have further complicated Nvidia’s current crisis.

A financial services company led by Lutnick, BGC Group, held a 33 percent stake in a joint venture with China Credit Trust, a Chinese state-owned company whose largest shareholder is China People’s Insurance Company, another state-owned enterprise.

Another company he ran, Cantor Fitzgerald, is still run by his two oldest sons. This company has helped several Chinese companies go public in the United States. Cantor Fitzgerald was also a key investor in Satellogic, a satellite company under contract with a Chinese data science company, Zhong Ke Guang Qi Space, until 2033.

His close ties to China were discussed during his Senate confirmation hearing last year. Senators questioned whether he could be unduly influenced by Chinese officials and how he would protect American technology.

Sen. Maria Cantwell, a Washington state Democrat, questioned Lutnick about potential conflicts of interest related to his investments in Chinese companies and Cantor Fitzgerald’s financial interests in Tether, a cryptocurrency company with a large footprint in China.

Other senators asked him how he would protect American technology from the Chinese Communist Party.

“How are you going to deal with the various threats that we see emanating from the CCP in these information and technology markets? » asked Republican Senator Deb Fischer of Nebraska.

Lutnick promised to be vigilant against threats from China.

“I have a very negative view of China,” he said in response to Fischer. “I think they only care about themselves and are out to harm us. So we need to protect ourselves.”

Before being sworn in as Commerce Secretary in February 2025, Lutnick resigned from all of his corporate leadership positions, effectively transferring his business empire to his children.

Since the start of his tenure as Commerce Secretary, the net worth of Lutnick and his family has doubled to $7.3 billion, thanks to his indirect stake in Tether, according to Forbes, which values ​​his stake in Tether at $5.4 billion. The value of the stake, worth $1.7 billion at the start of 2025, has more than tripled.

“Can we be sure that he is looking out for the public interest?” asked Kathleen Clark, a law professor and government ethics expert at Washington University in St. Louis. “What’s happening to him raises a lot of red flags.”

Lutnick’s friendship with Jensen Huang could also be problematic, Clark told CBS News.

Huang met Lutnick shortly after Lutnick began his tenure as Commerce secretary, Huang told podcaster Joe Rogan last year.

“He started our conversation by saying ‘Jensen, this is Secretary Lutnick,'” Huang said. “‘I just want to let you know that you are a national treasure. Nvidia is a national treasure. And any time you need access to the president, to the administration, you call us.'”

Huang added that whenever he calls the Commerce Secretary’s office, “if I want to get rid of something, express a concern, they’re always available.”

Huang also visited President Trump. He attended a $1 million-per-person dinner at Mar-a-Lago in April 2025. At that time, Huang tried to convince Mr. Trump to lift restrictions on sales of the company’s less advanced H20 chips to China, according to the New York Times. Less than three months later, in July 2025, Mr. Trump lifted the restrictions. Nvidia’s most advanced chip, the Blackwell, still cannot be sold directly in China.

In July 2025, Lutnick posted a photo on Instagram showing Huang in his famous black leather jacket, standing in the Oval Office next to Mr. Trump, who was seated at his desk. Lutnick is also in the photo with other visitors.

“It was great to meet Jensen Huang in the Oval Office on the same day Nvidia passed $4 trillion market cap,” the post said.