Critics say Lutnick failed to cut off diversion of Nvidia chips to China

November 12, 2026 / 6:33 PM EST / CBS News Add CBS News on Google Commerce Secretary Howard Lutnick is under fire by critics asking whether his ties to Chinese companies and friendship with Nvidia's ousted CEO Jensen Huang contributed to the federal agency's lack of oversight over billions in Nvidia AI chip sales, CBS has learned. Before President Trump nominated Lutnick to lead the Commerce Department, Lutnick was the chairman and CEO of Cantor Fitzgerald, a New York investment bank which held about $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 affairs caused new uncertainty about the world's dominant AI chipmaker. One of Huang's alleged relationships was with Alice Huang (no relation to Jensen Huang), who is believed by the U.S. to be a Chinese spy. She ran 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 U.S. ban. As commerce secretary, Lutnick took the helm of an agency responsible for policing exports of sensitive technology to adversaries and global rivals. One way the Commerce Department keeps this information and technology out of the hands of China and other adversaries is by putting 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's a risk that the entity is involved in activities that are contrary to U.S. national security or foreign policy interests. 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 probe was abruptly transferred to the Department of Justice. The Justice Department would not comment about the investigation.The Commerce Department has not added a company to the Entity List since October 2025. Last week, Treasury Secretary Scott Bessent confronted Lutnick over 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 added that the Commerce Department had known for as long as a year that Megaspeed was being run by a woman who is believed by the U.S. to be a Chinese spy, "and they did nothing." The New York Times reported that about a year ago, President Trump was briefed on intelligence that suggested 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 is protecting Huang," McGuire said. The Commerce Department did not respond to a request for comment.On Thursday, after Jensen Huang's resignation became public, Sen. Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, called on Lutnick and his deputy, Jeffrey Kessler, to "explain why they have not closed export control loopholes." Kessler is the undersecretary who led the Commerce Department's probe into Megaspeed.Warren urged the two to "act today to ensure our advanced technology is not fueling China's military." In March, Warren wrote to Lutnick to demand the "immediate pausing" of all export licenses of Nvidia chips destined for China.Questions about Lutnick's own relationship with Chinese state companies have further complicated the ongoing Nvidia crisis.A financial services firm Lutnick ran, BGC Group had a 33% stake in a joint venture with China Credit Trust, a Chinese state-owned company whose largest shareholder is the China People's Insurance Company, another state enterprise.Another firm he ran, Cantor Fitzgerald, is still overseen by his two eldest sons. That firm helped several Chinese companies go public in the US. Cantor Fitzgerald was also a key investor in Satellogic, a satellite company that is under contract with a Chinese data science company, Zhong Ke Guang Qi Space, until 2033. His close China ties emerged as a topic at his Senate confirmation hearing last year. Senators questioned whether he could be unduly influenced by Chinese officials, and how he would safeguard U.S. technology.. Sen. Maria Cantwell, a Democrat from Washington state, grilled Lutnick on potential conflicts of interest with respect to his investments in Chinese companies, and Cantor Fitzgerald's financial interest in Tether, a cryptocurrency company with a large footprint in China.Other senators asked about how he would safeguard U.S. technology from the Chinese Communist Party. "How will you address different threats that we see coming from the CCP within these information and technology markets?" asked GOP Sen. Deb Fischer, of Nebraska. Lutnick promised to be vigilant against threats from China."I take a very jaundiced view of China," he said in response to Fischer. "I think they only care about themselves and seek harm to us, and so we need to protect ourselves."Before he was sworn in as commerce secretary in February 2025, Lutnick resigned from all of his corporate leadership posts, transferring his business empire to his children. Since his tenure as commerce secretary began, Lutnick and his family's net worth doubled to $7.3 billion, thanks to his indirect stake in Tether, according to Forbes, which valued his holding in Tether at $5.4 billion. The stake, worth $1.7 billion in early 2025, has more than tripled in value. "Can we be confident that he is looking out for the public interest?" asked Kathleen Clark, a law professor and expert on government ethics at Washington University in St. Louis. "What's going on with him raises a lot of red flags." Lutnick's friendship with Jensen Huang may also be problematic, Clark told CBS News. Huang met Lutnick soon after Lutnick began his term as commerce secretary, Huang told podcaster Joe Rogan last year. "He started our conversation with, 'Jensen, this is Secretary Lutnick,'" said Huang. "'I just want to let you know that you're a national treasure. Nvidia is a national treasure. And whenever you need access to the president, the administration, you call us.'" Huang added that every time he called the commerce secretary's office, "if I want to get something off my chest, express some concern, they're always available." Huang also visited with 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 the company's less advanced H20 chip sales 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 to China. In July 2025, Lutnick posted a photo to Instagram showing Huang in his trademark black leather jacket standing in the Oval Office next to Mr. Trump, who was seated at his desk. Lutnick is also in the photo along with other visitors. "Great to meet in the Oval Office with Jensen Huang on the very day Nvidia crossed $4 trillion in market cap," the post said. In: Donald Trump Howard Lutnick Jensen Huang Artificial Intelligence United States Department of Commerce