Commerce Secretary Howard Lutnick faces an uncommon problem in modern Washington: Democrats and Republicans agree on something, and they agree on him.
A growing number of lawmakers from both parties are criticizing Lutnick over the administration’s refusal to add dozens of Chinese companies to a key US trade blacklist. They are also questioning whether the government properly oversaw Nvidia’s exports to China.
How a CEO’s departure sparked an export control dispute
On November 12, 2026, Nvidia announced that Huang had resigned immediately following an internal investigation. His departure came after revelations of an affair with Alice Huang, whom US authorities suspect of spying for Beijing, Reuters reported.
Alice Huang is a former executive at Megaspeed, a company now at the heart of the controversy. Megaspeed has bought more than $4.8 billion in Nvidia AI chips since June 2024, and is under investigation for allegedly diverting those chips to China.
Megaspeed’s assets reportedly grew from $33 million in 2023 to $3 billion in 2024. The increase has raised concerns among US officials about possible chip smuggling.
Why Lutnick is in the crosshairs
The Entity List is the Commerce Department’s trade blacklist. Inclusion on the list sharply limits a company’s ability to buy sensitive US technology.
Critics say Megaspeed and numerous other Chinese firms should already be on the list. Lutnick is accused of resisting efforts to add Megaspeed and other companies despite multiple warnings from officials.
The criticism is notably bipartisan. Democratic Senator Elizabeth Warren and Republican Senator John Kennedy are among the lawmakers leading it.
Lawmakers have called for investigations and are seeking testimony from Lutnick about his handling of export controls.
Critics also say Lutnick resisted tightening export controls even though President Trump approved stricter measures multiple times throughout 2026.
What the dispute means for Nvidia, Commerce and the chip sector
For Nvidia, the immediate challenge is maintaining leadership continuity amid intense scrutiny. Investors will likely pay closest attention to the company’s relationship with Megaspeed. Purchases exceeding $4.8 billion since June 2024 represent a substantial amount of business. If investigators confirm that chips were diverted to China, questions will arise about how the sales were vetted and what controls Nvidia had in place.
For the Commerce Department, the stakes are institutional. Bipartisan calls for testimony suggest Congress wants a detailed account of why Megaspeed and other firms were not added to the Entity List.
Several developments are worth watching: whether Lutnick testifies and what he says about the warnings he allegedly received; whether Commerce adds Megaspeed and other firms to the Entity List; and what the investigations ultimately conclude about where Megaspeed’s chips went.
