Commerce Chief Lutnick Received Classified Warning About Nvidia CEO's Relationship

The disclosure puts the Commerce Department, which decides which advanced American technology can be sold to rival countries, at the centre of the widening inquiry into Huang. Lutnick's department cleared sales of Nvidia's H200 chips to Chinese buyers this year, and the report raises the question of what weight it gave to the security warning when doing so. The department did not comment, according to Axios.

Secretary of State Marco Rubio oversaw the drafting of the memo, according to The New York Times, which Axios cited. The document drew on surveillance of Alice Huang and on a chip-smuggling investigation into her company, Megaspeed, and it circulated before President Donald Trump's May 13-15 trip to China. The Times also reported that Rubio warned Trump directly aboard Air Force One ahead of a refuelling stop in Anchorage, where Jensen Huang joined the delegation after not initially being invited.

On May 14, Reuters reported that the Commerce Department had cleared around 10 Chinese companies to buy Nvidia's H200 chips. Some export approvals came before the warning: Nvidia disclosed in February that it had received an H200 export licence, and Huang told Axios in March that the company held licences covering Chinese customers. It is not clear how many of those approvals turned into sales, because Beijing has halted some chip purchases despite the US clearances. Megaspeed bought billions of dollars of Nvidia chips, according to multiple media reports.

Asked about the matter on Monday, Trump said intelligence officials might have shown him the memo but that he did not recall it. "Certainly, it didn't make much of an impact on me," he said.

Pressure on the company and the administration has been building all week. Top Democrats on the House Foreign Affairs Committee have demanded answers from Lutnick about the administration's chip approvals, "including to companies with concerning links to China and amid alarming reports of potential Chinese intelligence ties to Nvidia CEO Jensen Huang". Lawmakers from both parties have promised investigations and are seeking closed-door testimony from Huang next week.

Nvidia has lost about $1 trillion in market value since the Times first reported the relationship, according to Axios, although part of that fall followed midterm elections in which many Democrats who had promised to slow the AI data centre buildout won seats. Huang acknowledged an affair in an email to staff on Sunday without naming the woman involved. Nvidia's board opened an independent investigation, said it still had confidence in his leadership, and said it had no reason to believe national security secrets had been compromised.

Inside the company, Huang has tried to carry on as normal. He was at Nvidia's Santa Clara headquarters on Monday and opened his regular morning meeting with senior executives by apologising for the affair, then moved straight to business without taking questions, people familiar with the meeting told CNBC. He was back in the office on Tuesday. Employees described the mood to CNBC as "sad", and some long-serving staff who had seen Huang as a near-infallible leader were struggling to come to terms with his conduct, the people said.

Nvidia reports quarterly results on November 17, a week after the memo came to light. It will be the company's first earnings call since the investigation began.