Commerce chief approved Nvidia chip exports to China despite spy warning, reports say

US Commerce Secretary Howard Lutnick approved Nvidia's exports of AI chips to China even after receiving a classified intelligence report warning of ties between Nvidia CEO Jensen Huang and a woman suspected of links to Chinese espionage, reports said. The controversy has deepened amid separate reports that sanctions against a company connected to the woman have also been stalled, raising questions about gaps in Washington's semiconductor export controls toward China.

According to Axios, Lutnick received a top-secret memo — based on intelligence gathered by US agencies — stating that Jensen Huang was in a romantic relationship with a woman suspected of ties to Chinese intelligence. The memo was circulated ahead of President Donald Trump's visit to China in May.

The New York Times also reported that Secretary of State Marco Rubio briefed Trump directly on the matter aboard Air Force One as it flew to China in May. Rubio was serving concurrently as national security adviser at the time.

The central concern is that the Commerce Department approved Nvidia's sales of advanced semiconductors to China even after those warnings were delivered. Reuters reported in May that the department had already cleared roughly 10 Chinese companies to purchase Nvidia H200 chips.

Axios said the approvals raised questions about how the Commerce Department assessed potential security risks when authorizing Nvidia's advanced chip sales to China-linked entities.

Separate allegations have emerged that sanctions against Megaspeed, a Singapore-based cloud company linked to the woman, have been held up. The Financial Times reported that multiple US agencies — including the Pentagon, the Department of State and others — had pushed to place Megaspeed on the Entity List, but the Commerce Department has been reluctant to act, leaving the sanctions in limbo.

Megaspeed has been under US government investigation on suspicion of smuggling Nvidia AI chips into China. The woman became involved in converting a Singapore subsidiary of a Chinese gaming company into Megaspeed in 2023 and was listed as a director until November of that year.

The State Department, the Pentagon, the Treasury Department and the Department of Energy have all pushed to add Megaspeed to the Entity List, but the process has stalled after the Commerce Department said it needed additional information on some of the companies under consideration. It has not been confirmed whether Megaspeed was among those for which the Commerce Department sought more information.

Chris McGuire, a former US export control official, criticized the inaction in comments to the Financial Times. "I cannot understand how the Commerce Department, knowing for months that Megaspeed was being run by a Chinese spy, took no steps to prevent the company from purchasing $4.8 billion worth of Nvidia chips," McGuire said.

However, the allegations — that the woman has ties to Chinese intelligence and that Megaspeed smuggled semiconductors — have not been established as fact. The Chinese government has denied the espionage claims. A direct link between Lutnick's receipt of the classified briefing and the individual export approval decisions also remains unconfirmed.