Congressional Democrats Launch Inquiry Into Trump Administration’s Nvidia China Chip Sales as Jensen Huang Resigns

WASHINGTON — Congressional Democrats launched a sweeping inquiry on Thursday into how the Trump administration handled Nvidia’s high-stakes chip sales to China, widening the fallout from a mounting national security and corporate governance scandal.

The announcement arrived just hours after Nvidia made the stunning announcement that it had ousted its co-founder and longtime CEO, Jensen Huang. In the wake of his removal, Huang also agreed to testify before a separate set of Republican-led congressional committees, marking a dramatic downfall for one of the most prominent figures in the global technology industry.

Huang’s abrupt removal from the company he built into a titan of artificial intelligence followed his public

confession that he had been involved in an extramarital affair with a woman accused of being a Chinese intelligence operative. Subsequent investigative reports have revealed that Huang allegedly engaged in multiple additional affairs with Nvidia employees, further compounding the crisis for the world’s leading semiconductor firm.

The alleged Chinese spy at the center of the initial disclosure has been identified as Alice Huang, an executive at Megaspeed, a Singapore-based customer of Nvidia. U.S. federal officials have raised serious suspicions that Megaspeed served as a front to funnel advanced, restricted Nvidia microchips into mainland China, circumventing strict U.S. export controls designed to curb Beijing’s technological and military advancements.

The new Democratic congressional inquiry is being spearheaded by Representative Richard Neal of Massachusetts, the ranking Democrat on the House Ways and Means Committee, and Senator Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee. Because Democrats currently operate in the minority in both chambers of Congress, they lack subpoena power and cannot legally compel the executive branch or corporate entities to produce documents or testimony. Nevertheless, their investigative reach allows them to formally demand answers, pose rigorous oversight questions, and shine a spotlight on potentially questionable executive branch actions.

In a sharply worded letter directed to Commerce Secretary Howard Lutnick, the Democratic lawmakers urged the Department of Commerce to immediately preserve all records concerning an arrangement they describe as both questionable and legally unconstitutional.

Detailing the mechanics of the policy, the letter outlines how the controversial arrangement functioned. President Donald Trump agreed to permit sales of Nvidia’s advanced H200 chips to buyers in China under a specific condition: the semiconductors, which are manufactured in Taiwan, had to be shipped first to the United States. Upon their arrival on American soil, the Trump administration levied a specific tariff on the hardware.

According to the congressional letter, this mechanism amounted to the administration "effectively taking a cut of Nvidia’s sales to China through what appears to be an unconstitutional export tax system." Following the imposition and payment of this tariff, the Commerce Department under Secretary Lutnick would issue the necessary export licenses to clear the hardware for delivery.

The revenue-sharing arrangement between the Trump administration and Silicon Valley chipmakers was not entirely a secret. In August 2025, public reports revealed that both Nvidia and rival semiconductor giant AMD had agreed to share 15 percent of their gross revenue from chip sales destined for China with the U.S. government. The unprecedented financial pact was struck as a condition for securing export licenses that bypassed standard federal restrictions.

However, the congressional inquiry spearheaded by Neal and Wyden zeroes in on deeper regulatory and security failures. The lawmakers questioned why Secretary Lutnick reportedly continued to authorize Megaspeed to purchase sensitive hardware even after U.S. intelligence agencies formally notified the department of their suspicions regarding Alice Huang and her personal relationship with Jensen Huang. Furthermore, the letter demands to know why the Commerce Department green-lit license applications for various other Asian corporate entities that allegedly maintained no physical presence at their registered corporate addresses. Consequently, the investigation places the Trump administration’s enforcement rigor and regulatory oversight directly in the crosshairs, extending far beyond the corporate boardrooms of Nvidia.

The inquiry also raises pressing questions regarding the timing of Nvidia’s corporate donations and political contributions to projects associated with President Trump. The lawmakers noted that the lucrative export deal was officially approved only after the administration became aware of what the letter terms "Mr. Huang’s compromised position" regarding his relationship with the alleged spy, and concurrently after Nvidia contributed $26 million toward Trump-backed initiatives, including a prominent ballroom project. The lawmakers’ questions suggest an implicit line of inquiry into whether the administration leveraged its insider knowledge of Huang’s personal life to extract substantial financial contributions from the tech giant.

The intersection of executive power, corporate compliance, and personal coercion was further highlighted during a television interview that aired on Sunday. In a segment on "60 Minutes," President Trump recounted how he and his administration had directly threatened an unnamed chief executive officer of a major artificial intelligence company with imprisonment. According to Trump’s public statements during the broadcast, the unnamed executive "totally changed" their posture and compliance following the threat.

This new oversight push by House and Senate Democrats represents the second major congressional investigation opened into Nvidia’s China operations and its cozy interactions with the White House since the revelations regarding the alleged spy ring first surfaced. A separate, concurrent Republican-led congressional probe involves senior leaders from the House Select Committee on the Chinese Communist Party, the House Committee on Foreign Affairs, and the House Intelligence Committee.

That Republican-led coalition had previously issued stern demands for Jensen Huang to appear before them for a closed-door deposition, threatening to issue formal subpoenas if he refused to cooperate voluntarily. Following his resignation from Nvidia, Huang formally agreed on Thursday to comply with the Republican committee’s request and testify before lawmakers.

As both inquiries move forward, the dual scandals surrounding corporate governance failures, espionage allegations, and executive branch policy implementation promise to maintain intense scrutiny on the highest levels of the American technology sector and federal regulatory agencies.