White House Weighs Ousting Howard Lutnick Amid Nvidia $4.8 Billion China Chip Scandal

WASHINGTON — Senior White House officials are actively debating whether to push out Commerce Secretary Howard Lutnick. The internal revolt follows a widening espionage scandal surrounding Nvidia's now-former chief executive Jensen Huang. Pressure inside the administration escalated Thursday as lawmakers accused Lutnick of deliberately gutting export oversight on advanced artificial intelligence processors shipped toward Beijing.

Huang resigned Thursday after security inquiries flagged his relationship with Alice Huang, an executive at Singapore-based Megaspeed. Megaspeed poured more than $4.8 billion into advanced Nvidia artificial intelligence chips since June 2024. Federal authorities suspect Alice Huang of intelligence operations for the Chinese government. Lutnick now sits directly in the crosshairs.

The backlash had brewed for months. Yet the fallout from Huang's sudden departure shattered the Commerce Department's defenses. Congressional critics charge that Lutnick systematically stalled enforcement against foreign networks funneling American silicon into Chinese military hands.

The Blacklist Freeze and Megaspeed Inquiries

Lutnick halted additions to the federal trade blacklist for months. The Commerce Department has not added a single Chinese firm to the restricted Entity List since October 2025. That marks the longest regulatory freeze in more than a decade. Internal agency decisions held off sanctions against Chinese artificial intelligence developer DeepSeek, state-backed memory chipmaker CXMT, and more than 100 other corporate entities identified as acute threats to American national security.

Department officials justified the paralysis as an attempt to avoid inflaming trade friction with Beijing. Capitol Hill rejected that rationale outright.

Senator Warren and incoming Senate Foreign Relations Committee Chair Chris Coons dispatched formal preservation demands to Lutnick, Secretary of State Marco Rubio, and White House Chief of Staff Stephen Miller. The order instructs the executive branch to retain every document, cable, and internal communication concerning Nvidia shipments and Chinese military diversion risks.

Bipartisan Fury Over the H200 Export Levy

Bipartisan fury erupted across both chambers of Congress. Arkansas Republican Senator Tom Cotton, who chairs the Senate Intelligence Committee, demanded that Lutnick immediately bar CXMT from the American market and sever its access to domestic technology. CXMT did not respond to requests for comment.

Republican Senator John Kennedy warned that Lutnick must prepare for grueling public testimony before lawmakers. The Louisiana conservative refused to defend the Commerce chief's tenure.

"This is as serious as an aneurism," Kennedy said, adding that he has not yet determined whether Lutnick should be fired.

Senate Finance Committee ranking Democrat Ron Wyden and House Ways and Means Committee ranking Democrat Richard Neal launched an inquiry targeting Lutnick directly. Their probe focuses on the administration's December 2025 decision granting Nvidia permission to export high-performance H200 processors to Chinese purchasers. In that arrangement, the executive branch permitted advanced shipments in exchange for a direct financial cut of the export sales. Wyden and Neal denounced the transaction as an illegal, unconstitutional export tax structured to enrich state coffers at the expense of national security.

Earlier on Thursday, an executive spokesperson asserted that the president maintained full confidence in Lutnick's ability to direct the agency. That defense cracked hours later as West Wing aides opened talks on his potential dismissal.

Congressional panels will finalize subpoena schedules in the coming days, forcing Lutnick and his top deputies to answer under oath when lawmakers convene formal oversight hearings next month.