Lutnick was warned of Nvidia CEO’s ties to suspected spy

Commerce Secretary Howard Lutnick was sent a highly classified memo warning about Nvidia ↘ 5.47% CEO Jensen Huang's relationship with Alice Huang, whom U.S. officials suspect of being a Chinese spy, according to multiple people familiar with the matter who spoke to Axios. Lutnick runs the agency responsible for keeping sensitive U.S. technology away from adversaries. The report raises questions about how Commerce weighed security risks when it cleared advanced Nvidia chip sales to China-affiliated buyers. The department did not comment, Axios reported. Reuters said it could not immediately verify the Axios report.axios.com+1

The memo and the chip approvals

Secretary of State Marco Rubio oversaw the drafting of the memo this spring. It cited intelligence that Alice Huang was an asset of China's Ministry of State Security who had been recruited to gather information on Jensen Huang and possibly push Nvidia to seek access to its most advanced chips for China, The New York Times reported. The two are not related. Axios said the memo drew on surveillance of Alice Huang and on a chip-smuggling investigation into her company, Megaspeed, and that it circulated before President Trump's May 13–15 trip to China.nytimes.com

On May 14, Reuters reported that Commerce had cleared about 10 Chinese companies to buy Nvidia's H200 chips, according to Axios. Some approvals came before the warning, and it is not clear how many of them led to actual sales, since Beijing has halted some chip purchases. On Tuesday, The Information reported that the relationship helped make possible at least $7.5 billion in Nvidia chip shipments to Chinese firms, Reuters reported.reuters.com+1

Trump says the warning made little impression

The Times also reported that Rubio told Trump about the intelligence aboard Air Force One in May, shortly before Jensen Huang joined the Beijing trip. That account contradicts Trump's claim on Monday that he did not know about the relationship at the time, Political Wire noted. Asked about the memo, Trump said, "It could have been mentioned. Certainly, it didn't make much of an impact on me," ANI reported. China's foreign ministry dismissed the spying allegations as "slander and smearing," The Ringer reported.politicalwire.com+2

Mounting fallout

Jensen Huang admitted to the affair on Sunday. Nvidia's board then opened an independent investigation, said it still had confidence in his leadership, and said it had no reason to believe national security secrets were compromised, Axios reported. Nvidia shares fell again on Tuesday after dropping 4.3% on Monday, and Microsoft ↘ 2.20% briefly passed the chipmaker in market value, according to Reuters.axios.com+1

Lawmakers from both parties have promised investigations, including closed-door testimony from Jensen Huang next week. Democrats on the House Foreign Affairs Committee have pressed Lutnick about the chip approvals. "National security must come before corporate sales targets," they wrote, per ANI.tribuneindia.com