Lutnick's Commerce Department licenses Nvidia's China chips. The Huang scandal is putting his own job in question.

Axios reported on Wednesday that on 5 November Treasury Secretary Scott Bessent asked Howard Lutnick in the White House Situation Room why Megaspeed, the Singapore data-centre company at the centre of the Nvidia scandal, was not on the Commerce Department's Entity List of restricted firms. "How come Megaspeed isn't on the entities list?" Bessent reportedly asked. Lutnick, the account says, replied: "I don't know. I'll look into it."

Commerce called the account false. "Secretary Bessent and Secretary Lutnick had no such conversation," a spokesperson said. The report followed an earlier one from Axios that Lutnick was sent a highly classified memo about Jensen Huang's relationship with a Megaspeed executive whom US officials suspect of working for Chinese intelligence, which China denies. No official has confirmed the memo. Nvidia's board has opened an investigation into Huang and is reported to be weighing his future.

The man who writes the licences

Commerce matters here because its Bureau of Industry and Security runs US export licensing. Lutnick has defended the Nvidia licences in public. At a hearing on 10 February he said the terms were "very detailed" and had been "worked out together with the State Department", and that Nvidia "must live with" them. On 22 April, asked by senators whether any H200 chips had gone to China, he said: "We have not sold them any chips as of yet." Commerce had licensed the sales, he added, but Beijing had not allowed them.

Reuters reported on 14 May that Commerce had cleared about 10 Chinese companies, including Alibaba, Tencent and ByteDance, to buy the H200, each for up to 75,000 chips, according to two sources. It said no chip had been delivered. Nvidia's own filing for the quarter to 26 April says the licences cover "small amounts" for "specific China-based customers", require the chips to be inspected in the United States, and had produced no revenue when it was filed.

What is and is not established

The reports do not show that the memo should have changed any licensing decision, or that it did not. Some approvals came before the warning. Nvidia disclosed an H200 licence in February, and the memo is said to have circulated before Trump's trip to China in mid-May. The New York Times reported that a memo on Huang was drafted under Secretary of State Marco Rubio and shared with a small group of senior officials. It is unclear whether that is the document Axios says Lutnick received.

The Megaspeed question is separate from the H200. Sources told Axios that White House and intelligence officials had pressed Lutnick since autumn 2025 to list the firm, and that he resisted because it could escalate trade tensions with China. The New York Times reported that Commerce has added no company to the list in more than a year. Megaspeed denies wrongdoing. House Democrats have asked Lutnick to explain approvals "including to companies with concerning links to China".

What traders make of it

Traders put the chance that Lutnick is out as commerce secretary by 31 December at 31.5%, up 10.5 points in a day and from 20% a week ago. That reading rests on only about $42,000 of trading, though a wider market on who leaves the administration before 2027 shows the same 31.5%.