Congressional Democrats initiated a formal inquiry on Thursday examining how the Trump administration managed Nvidia chip sales to China. The investigation follows a tumultuous day for the tech giant, which saw the ousting of co-founder and CEO Jensen Huang after he confessed to an extramarital affair with Alice Huang, a woman accused of operating as a Chinese spy and serving as an executive at Nvidia customer Megaspeed. U.S. officials suspect Megaspeed, based in Singapore, of routing advanced Nvidia chips into China. Furthermore, additional accusations have surfaced regarding alleged affairs between Huang and various Nvidia employees.
The parliamentary inquiry was launched by Representative Richard Neal, the top Democrat on the House Ways and Means Committee, and Senator Ron Wyden, the ranking Democrat on the Senate Finance Committee. Although operating as the minority party limits their ability to compel answers, the lawmakers directed a sharply critical letter to Commerce Secretary Howard Lutnick. The correspondence requests the preservation of records concerning an arrangement the politicians characterize as questionable and illegal.
According to the lawmakers' outlined scheme, President Trump permitted sales of Nvidia H200 chips to China contingent on the Taiwan-manufactured semiconductors arriving first in the United States. Upon arrival, the administration applied a tariff, which the letter describes as an unconstitutional export tax system effectively extracting a financial cut from Nvidia's Chinese sales. The Commerce Department subsequently issued the necessary export license. Stay updated on the latest developments in AI news as this congressional investigation continues to unfold.
The revenue-sharing arrangement itself was previously made public in August 2025, when both Nvidia and AMD agreed to dedicate 15 percent of their China-bound chip revenue to the U.S. government to secure export clearance. However, the congressional letter questions why Secretary Lutnick continued permitting Megaspeed to purchase semiconductors even after intelligence officials reportedly flagged their suspicions regarding Alice Huang and her relationship with the chief executive. Additional inquiries challenge the department's approval of other Asian entities lacking physical presences at their listed corporate addresses.
Beyond administrative decisions, the letter scrutinizes how financial contributions factored into federal approvals. Lawmakers noted that the export agreement gained clearance after reports emerged of Huang's compromised position and following a $26 million donation from Nvidia toward presidential projects, including a new ballroom. This timing suggests potential questioning over whether leverage was utilized to secure corporate funding. Adding context to the political pressure, President Trump noted in a recent television interview that his administration previously threatened an unnamed artificial intelligence executive with imprisonment, prompting a complete shift in attitude.
This congressional investigation represents the second parliamentary probe into Nvidia's Chinese commercial operations since the espionage scandal emerged. A separate Republican-led coalition, featuring leaders from the House Select Committee on the Chinese Communist Party, the Foreign Affairs Committee, and the Intelligence Committee, previously demanded closed-door testimony from Huang under threat of a formal subpoena. Following his resignation, Huang agreed to testify before those committees.
