White House weighs pushing out Lutnick as Commerce faces questions over a classified warning on Nvidia’s chief

Senior White House officials are discussing whether Commerce Secretary Howard Lutnick should be pushed out in the wake of the spy scandal surrounding Nvidia’s former chief executive, Jensen Huang^4,9.

The White House said on Thursday that President Donald Trump continues to back Lutnick as he faces criticism from Capitol Hill⁷.

The White House is standing by Lutnick despite a view within the administration that he delayed action to address concerns over chip smuggling to China².

Lutnick stalled Trump’s crackdown on companies suspected of diverting Nvidia’s chips to China, according to reporting on internal deliberations^11,13.

Treasury Secretary Scott Bessent had earlier confronted Lutnick over his department’s handling of the issue¹³.

Lutnick has not been removed, and the discussion among senior officials has not produced a decision on his future^7,9.

The classified warning

Lutnick was sent a highly classified memo warning about Huang’s relationship with suspected Chinese spy Alice Huang, multiple sources familiar with the matter said³.

Secretary of State Marco Rubio oversaw the drafting of the memo³.

US intelligence officials believe Alice Huang is a Chinese intelligence agent³.

The warning raises questions about how Commerce weighed security risks as it cleared advanced Nvidia chip sales to China-affiliated entities³.

Lutnick’s department is also facing criticism over its failure to crack down on Megaspeed, the Chinese AI firm at the centre of the affair⁸.

Why it matters to investors

Lutnick oversees the agency charged with keeping sensitive US technology out of the hands of American adversaries³.

Lawmakers want to know what the administration did or did not do in response to the intelligence, and Lutnick is squarely in their field of view².

Republican Senator Jim Banks said Lutnick should testify as soon as possible, as a bipartisan group of lawmakers circles the secretary⁵.

A growing number of lawmakers criticise the administration’s refusal to act against dozens of Chinese firms¹⁰.

A Democratic senator wants an assessment of whether Nvidia is too big to fail¹.

Who runs Commerce will shape the next round of chip export controls on China^3,10.

Investors will watch whether Lutnick is called to testify and whether Commerce moves to blacklist more Chinese firms^5,8.