What the Democrats Are Investigating
Democrats in Congress opened an inquiry on Thursday into how the Trump administration handled Nvidia’s chip sales to China, TechCrunch reported. The inquiry comes from Representative Richard Neal of Massachusetts, the top Democrat on the House Ways and Means Committee, and Senator Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee.
As the minority party, the two lawmakers can ask questions but cannot compel answers. Their letter to Commerce Secretary Howard Lutnick asks the department to preserve records about an arrangement they find questionable and, they allege, illegal.
“The scheme worked like this,” the letter says. President Donald Trump agreed to sales of Nvidia’s H200 chips to China as long as the chips, manufactured by Taiwan, were first shipped to the United States. On arriving, Trump added a tariff “effectively taking a cut of Nvidia’s sales to China through what appears to be an unconstitutional export tax system,” the letter said. Then the Commerce Department, under Lutnick, issued an export license.
The revenue-sharing part of the deal was public. In August 2025, Nvidia and AMD both agreed to share 15 percent of their revenue from chip sales to China with the U.S. government as part of a deal to secure export licenses, the Associated Press reported at the time.
What the Letter Questions
The letter goes further than the revenue deal. It questions why Lutnick continued to allow Megaspeed to buy chips even after he was reportedly informed by U.S. intelligence of suspicions about Alice Huang, and of Jensen Huang’s relationship with her. Megaspeed is a Singapore-based Nvidia customer that U.S. officials suspect of helping route advanced Nvidia chips into China, and Alice Huang was an executive there.
It also questions why the department reportedly green-lit other Asian companies to buy Nvidia chips “with no physical presence at their listed addresses.” The inquiry is aimed at the administration, not just Nvidia and Huang.
The letter also questions how Nvidia’s donations to Trump’s projects factored in. It notes that the export deal was approved after Trump learned of “Mr. Huang’s compromised position” in sleeping with an alleged spy, and after Nvidia donated $26 million toward Trump’s projects, including the ballroom. It appears to be asking whether Trump used his knowledge of the affair to secure donations from Nvidia.
The Second Congressional Investigation
This is the second congressional investigation into Nvidia’s China sales since news of the alleged spy affair broke. The Republican-led group involves leaders from the House Select Committee on the Chinese Communist Party, the House Committee on Foreign Affairs, and the House Intelligence Committee. That group demanded that Huang testify in a closed-door session and threatened to subpoena him if he did not agree voluntarily. On Thursday, after his resignation, he agreed.
The backdrop is a fast-moving scandal. Huang was removed from the company he founded on Thursday after he confessed to an extramarital affair, amid reports of a relationship with Alice Huang, a woman U.S. officials suspect of being a Chinese spy. He has since been accused of having more affairs with Nvidia employees. Interim chief executive Colette Kress now leads the company.
In a “60 Minutes” interview with President Trump that aired on Sunday, he mentioned how he and his team had threatened an unnamed AI executive with jail, and after that, the executive “totally changed.” The letter does not name the executive, and TechCrunch notes the remark only as context for the inquiry.
Why It Matters
The inquiry turns a corporate scandal into a question about how export policy was made. The core allegation is not only that Nvidia sold chips to China, but that the administration built a system in which the government took a cut of those sales, and kept licenses flowing even after intelligence warnings about the company’s customers.
Whether anything comes of it depends on what the Commerce Department hands over, and Democrats cannot compel it to do so. But the letter puts Lutnick, who is already under pressure from both parties over chip export enforcement, at the center of a second front. The White House is separately discussing Lutnick’s future, Reuters reported on Thursday, and the Democratic inquiry adds a formal paper trail to the political case against him.
For Nvidia, the investigation is another front in a week that has already brought a Justice Department antitrust probe, a criminal investigation into its customer Megaspeed, and the loss of the chief executive who built the company. The question now is less about one executive’s conduct and more about whether the system that let advanced chips flow toward China will be rewritten.
