🇺🇸 Senior White House officials are discussing whether to remove Commerce Secretary Howard Lutnick amid fallout from an alleged Chinese spying scandal involving former Nvidia CEO Jensen Huang.

Lawmakers have criticized Lutnick for failing to tighten restrictions on AI chip exports to China and blacklist Chinese companies.

Lutnick has repeatedly stalled Trump’s crackdowns on AI firms diverting Nvidia chips to China.

Most recently, Lutnick putatively refused, against the President’s orders, to add Megaspeed to a federal export blacklist for over 13 months. As of today, Megaspeed has still not been added to the blacklist.

Under Lutnick, the Commerce Department went its single longest stretch of time ever without putting a single company on its federal trade blacklist, from October 2025 to November 2026.

Megaspeed is the Sinagore-based Chinese front-company currently in the news because Alice Huang, the alleged Chinese spy who seduced Nvidia CEO Jensen Huang, bought and rebranded it in March 2023 before purchasing $4.8 billion in Nvidia chips between June 2024 and February 2026.

Treasury Secretary Bessent most recently confronted Lutnick over his confounding actions during a meeting with Marco Rubio, Pete Hegseth, and Jamieson Greer in the Situation Room.

Lutnick has been at the epicenter of many of the corruption scandals consistently plaguing the administration, from his sons, who inherited Cantor Fitzgerald, nakedly profiteering off of tariff refunds, to his own business involvement with Jeffrey Epstein, which he initially lied about.

Trump, however, maintains “complete confidence” in Lutnick, according to a White House official.

🔗 https://www.reuters.com/world/china/white-house-discussing-howard-lutnicks-future-commerce-secretary-people-familiar-2026-11-12/

💻️ This is the biggest irony of the whole Alice Huang / Nvidia saga: the Chinese government actually doesn't want Nvidia chips and is actively keeping them out of the country.

Last year it even ordered Alibaba and ByteDance to cancel their Nvidia orders and sent customs teams to the ports to check every advanced chip coming in.

And right now 600,000 Nvidia H200s are stuck in Hong Kong because Beijing won’t let them into the country Nvidia also explicitly frames this as a threat to its business in its latest annual report to the SEC: "The Chinese government has encouraged customers to purchase from our China-based competitors and discouraged customers from purchasing, importing, or using our data center products".

Why does China do that? Because every Nvidia chip a Chinese company buys is one that Huawei or Cambricon doesn’t sell, and domestic chips can only catch up if people actually buy them (which means money for R&D, etc.).

Which means that the notion that Chinese intelligence was running honeytraps to get more Nvidia chips into China gets the whole thing exactly backwards.

In fact, it looks like Megaspeed - Alice Huang's company - was a counter-reaction to official Chinese policy: a private sector workaround to these efforts by the Chinese government to curtail Nvidia. As was widely reported - including by Western media - Megaspeed built data centers in Southeast Asia and rented their computing power to Alibaba, which the New York Times called "a backdoor way of getting access" to Nvidia chips.

That is a backdoor not only - allegedly - around Washington’s export controls, but also around China's own efforts to wean its companies off Nvidia.

I can’t believe the Chinese government was too thrilled about it: it'd make just about zero sense for it to run countless domestic measures to prevent Alibaba from using Nvidia chips, yet at the same time have its top spy agency help the same Alibaba get Nvidia chips through the back door in Southeast Asia

At the end of the day, as with all such stories, you always need to look at "cui bono?": who benefits? Who benefitted is pretty clear:

- Nvidia itself: it's in the business of selling chips so a customer willing to spend billions of dollars on chips in Southeast Asia is a godsend. Again, as they themselves state in their SEC filings, not being able to tap into Chinese demand would have "a material and adverse impact on our business

- Chinese companies like Alibaba: facts are, 1) Chinese chips haven't yet caught up, 2) Chinese chip companies' production capabilities are still limited and 3) Chinese tech firms' historical tech stack runs on Nvidia’s CUDA ecosystem, and rewriting years of code for Huawei chips is painful. Renting Nvidia chips in Southeast Asia is the easy way to stay competitive and serve customer demand in the meantime.

- The US, according to core members of the Trump administration: back in July last year, US Commerce Secretary Howard Lutnick explained that the point of letting Nvidia sell more chips to China was to get Chinese developers "addicted to the American technology stack"

📝 Mark Ames: To me the Nvidia scandal/Huang takedown has echoes of the Banker Wars under Late Yeltsin, when so much power was concentrated in so few hands that the oligarchs eventually went to war against each other using kompromat to destroy each other—and themselves.

📎 Arnaud Bertrand