Howard Lutnick, the commerce secretary, left Megaspeed International off the U.S. trade blacklist after receiving a classified warning in May about its former executive Alice Huang, whom U.S. intelligence officials suspect of spying for China.

Senior White House officials are discussing whether Lutnick should be pushed out, two people familiar with the discussions said on 12 November, the day Jensen Huang's resignation as Nvidia's chief executive was announced. A White House official said Trump "maintains complete confidence in the secretary". Federal prosecutors are investigating Megaspeed, Nvidia's largest customer in Southeast Asia, on suspicion of smuggling chips to China. The company denies wrongdoing and has not been charged.

The Commerce Department decides which foreign companies go on the Entity List, which bars them from receiving U.S. technology without a licence. It has published no addition to the list since 9 October 2025, the longest gap between new listings in more than a decade. Trump approved a crackdown on companies suspected of diverting Nvidia chips to China in May, in August and on 5 November, and Lutnick and his deputies resisted each order, according to people familiar with the meetings.

Kristen Eichamer, a Commerce Department spokesperson, said Lutnick and Scott Bessent, the Treasury secretary, had held no conversation about Megaspeed. Entity List decisions are made across the administration, the department said. Neither the White House nor the department has commented publicly on Lutnick's future.

The memo and the H200 sales

Marco Rubio, the secretary of state and national security adviser, oversaw a classified assessment in the spring of 2026 that drew on electronic surveillance of Alice Huang and on a chip-smuggling investigation into Megaspeed. It concluded that China's Ministry of State Security had recruited her to gather intelligence on Jensen Huang and Nvidia's chips. The aim may have extended to steering Nvidia to press the U.S. government for Chinese access to advanced processors. The memo went to a handful of senior officials before Trump's visit to China from 13 to 15 May, and Lutnick received it directly.

Rubio also briefed Trump aboard Air Force One before a refuelling stop in Anchorage, where Jensen Huang was added to the delegation. On 14 May, during the visit, the Commerce Department cleared about 10 Chinese companies to buy Nvidia's H200 processors, which had been barred from sale to China until December 2025. Trump said on 9 November that the FBI was looking into the relationship between Jensen Huang and Alice Huang. The attorney general, Todd Blanche, said on 12 November that the Justice Department had not concluded she was a spy.

Megaspeed and the Entity List

Commerce Department agents began investigating Megaspeed in 2024. In August 2025 Tim Teter, Nvidia's general counsel, emailed the agents to say that Jeffrey Kessler, the under-secretary in charge of export enforcement, had allowed Nvidia to contact them. The department paused its inquiry and passed the case to the Justice Department. A Commerce spokesman said the department handled it by the book.

Senator Tom Cotton, the Arkansas Republican who chairs the Senate Intelligence Committee, wrote to Lutnick about Megaspeed on 13 October 2025 and asked who was helping the Chinese Communist Party get around U.S. export controls. The State, Treasury and Energy departments and the Pentagon pressed for Megaspeed to be listed, according to people familiar with the discussions. Kessler received repeated warnings about the company. "That's a decision for the secretary," he said, according to people briefed on the discussions.

Bessent raised it in the White House Situation Room on 5 November, with Rubio and Pete Hegseth, the defence secretary, in attendance. "How come Megaspeed isn't on the entities list?" he asked, according to a person briefed on the meeting. Lutnick replied that he would look into it and later said he would need to check with Trump. Bessent, Hegseth, Rubio and Jamieson Greer, the trade representative, favour tougher measures than Lutnick, according to the same account.

Megaspeed imported Nvidia hardware worth at least US$4.6 billion, containing at least 136,000 processors, from its founding in 2023 to late 2025, according to trade records. More than half came from Nvidia's Blackwell range, which Trump has said he will not approve for China. Senator John Kennedy, a Louisiana Republican, said on 11 November that Lutnick must explain himself "in front of God and country".

Cantor Fitzgerald and his sons

Lutnick ran Cantor Fitzgerald from 1991 and handed the chairman's and chief executive's jobs to his son Brandon in February 2025, when he joined the cabinet. He transferred his stake to trusts for his four children. Cantor has held Tether's reserves since 2021, and in 2024, with Lutnick taking part in the negotiations, it bought a convertible bond worth about US$600 million that carries a 5 per cent stake in the stablecoin issuer.

In October 2025, as Lutnick sold his Cantor stake to his children's trusts, Tether lent an undisclosed sum to Dynasty Trust A, which holds more than half of Cantor's equity, according to a credit document filed in New York state. The loan is secured on all the trust's assets. Senators Elizabeth Warren and Ron Wyden asked Lutnick whether Tether's money paid for his divestiture and whether he had any part in arranging it. Kush Desai, a White House spokesman, said the only special interest guiding the administration was "the best interest of the American people".

USA Rare Earth, a critical minerals company, agreed in January 2026 to a tentative US$1.6 billion deal giving the Commerce Department about 10 per cent of its shares. To close it, USA Rare Earth raised US$1.5 billion privately with Cantor as lead placement agent. Warren, Wyden, Chris Van Hollen and Zoe Lofgren wrote to Cantor and USA Rare Earth in July demanding documents, after Lutnick declined to answer their questions. In December 2025, 25 Democrats asked the department's inspector general to examine whether Lutnick's promotion of AI data centres benefited Newmark Group, a property broker in which Cantor is invested. The department said Lutnick had complied with his ethics agreement.

Jeffrey Epstein

Lutnick lived next door to Jeffrey Epstein in Manhattan and said in a 2025 podcast interview that he had decided never to be in the same room as Epstein again after touring his home in 2005. The Justice Department released 3 million pages of Epstein records on 30 January 2026 under the Epstein Files Transparency Act. Emails in the release show Lutnick arranging drinks with Epstein in May 2011, planning a visit to Little St. James, Epstein's Caribbean island, in December 2012 and inviting him to a Hillary Clinton fundraiser in November 2015. The two invested in the same company, Adfin, and stayed in contact as late as 2018.

Questioned by a Senate appropriations subcommittee on 10 February, Lutnick confirmed that he, his wife, their children and nannies had lunch with Epstein on the island in 2012. "We had lunch on the island, that is true, for an hour," he said. He also confirmed an hour-long meeting at Epstein's home in 2011. Both took place after Epstein's 2008 conviction for soliciting prostitution from a minor.

Thomas Massie, the Kentucky Republican who co-wrote the transparency law, and Ro Khanna, his Democratic co-author, called on Lutnick to resign, as did Senators Jacky Rosen and Adam Schiff. In a closed-door deposition to the House Oversight Committee in May, Lutnick said he had met Epstein three times and had not known that Epstein was an early investor in Adfin. Democrats on the committee said he had been evasive.

Trump

Trump named Lutnick co-chair of his transition team with Linda McMahon in August 2024, and nominated him to run the Commerce Department that November, the month Cantor's 5 per cent stake in Tether was reported. Trump has called scrutiny of the Epstein files a hoax and said in February that he had not read the new release. He kept Lutnick through the resignation demands.

Democrats take control of House committees in January after the midterm elections. Warren, who will chair the Senate Banking Committee, and Chris Coons, the incoming chair of the Foreign Relations Committee, wrote to Lutnick, Rubio and Stephen Miller, the White House chief of staff, on 11 November. They told the administration to preserve all documents on Nvidia's exports of advanced AI chips to China and the national security risks involved.

Sources

  1. Reuters (via Yahoo Finance), "White House discussing Howard Lutnick's future as Commerce secretary, people familiar say", 12 November 2026, https://ca.finance.yahoo.com/news/white-house-discussing-howard-lutnicks-181859215.html
  2. Federal Register, Bureau of Industry and Security, "Additions to the Entity List", 9 October 2025, https://www.federalregister.gov/documents/2025/10/09/2025-19508/additions-to-the-entity-list
  3. Reuters (via BNN Bloomberg), "Lutnick stalled Trump crackdown on diversion of Nvidia chips to China, Axios reports", 12 November 2026, https://www.bnnbloomberg.ca/business/company-news/2026/11/12/lutnick-stalled-trump-crackdown-on-diversion-of-nvidia-chips-to-china-axios-reports/
  4. Axios, "Scoop: Commerce's Lutnick was sent warning on Nvidia CEO affair", 10 November 2026, https://www.axios.com/2026/11/10/lutnick-nvidia-jensen-huang-china-memo
  5. The New York Times (republished by The Philadelphia Inquirer), report on the Commerce Department's Megaspeed investigation, 9 November 2026, https://www.inquirer.com/news/nation-world/nvidia-investigation-commerce-justice-ai-chinese-spy-megaspeed-jensen-huang-trump-jeff-kessler-lutnick-20261109.html
  6. Senator Tom Cotton, letter to Secretary Howard Lutnick on Megaspeed, 13 October 2025, https://www.cotton.senate.gov/imo/media/doc/101325lutnickletter.pdf
  7. Fortune (Jeffrey Sonnenfeld and Steven Tian), "After Jensen Huang is Howard Lutnick the prime target of national security inquiry?", 12 November 2026, https://fortune.com/2026/11/12/jensen-huang-howard-lutnick-national-security-commerce-department
  8. Benzinga (summarising Axios), "Scott Bessent Confronts Lutnick Over Failure to Flag Nvidia Customer Megaspeed", 11 November 2026, https://www.benzinga.com/news/politics/26/11/63173108/scott-bessent-confronts-lutnick-over-failure-to-flag-nvidia-customer-megaspeed-as-trump-backs-fresh-china-chip-crackdown-report
  9. Axios, "Scoop: Bessent confronts Lutnick in Situation Room over China inaction", 11 November 2026, https://www.axios.com/2026/11/11/bessent-lutnick-megaspeed-nvidia-china-chips
  10. Bloomberg, "Nvidia's Biggest Southeast Asian Partner Dogged by China Chip Smuggling Questions", 22 December 2025, https://www.bloomberg.com/news/features/2025-12-22/nvidia-partner-megaspeed-draws-china-chip-smuggling-concerns-in-us
  11. Bloomberg (republished by Crain Currency), "As Lutnick sold Cantor to his children, Tether gave them a loan", 19 March 2026, https://www.craincurrency.com/node/1023086
  12. DL News, report on Senators Warren and Wyden's questions to Howard Lutnick over Tether ties, 2026, https://dlnews.com/articles/regulation/dem-senators-question-howard-lutnick-over-tether-ties
  13. Office of Senator Elizabeth Warren, "Warren, Wyden, Van Hollen, Lofgren Lead New Probe Into Cantor Fitzgerald, USAR After $1.6 Billion Trump Administration Deal", July 2026, https://www.warren.senate.gov/newsroom/press-releases/warren-wyden-van-hollen-lofgren-lead-new-probe-into-cantor-fitzgerald-usar-after-1-6-billion-trump-administration-deal/
  14. Bloomberg, "Democrats Urge Investigation Into Lutnick's AI Data Center Policy Ties", 18 December 2025, https://www.bloomberg.com/news/articles/2025-12-18/lutnick-s-data-center-ties-face-democratic-lawmaker-scrutiny
  15. Yahoo News, "U.S. Commerce Secretary Confirms He Visited Epstein's Island", February 2026, https://www.yahoo.com/news/articles/u-commerce-secretary-confirms-visited-192117100.html
  16. Newsweek, "Howard Lutnick Admits Epstein Island Visit After 2008 Conviction", 10 February 2026, https://www.newsweek.com/howard-lutnick-admits-post-conviction-epstein-meetings-resignation-calls-11498376
  17. Axios, "Dems demand Lutnick's resignation over Epstein files", 10 February 2026, https://www.axios.com/2026/02/10/howard-lutnick-resignation-epstein-files-congress
  18. CBS News, "Lutnick testified he knew little about Epstein, his next-door neighbor", May 2026, https://www.cbsnews.com/news/howard-lutnick-jeffrey-epstein-testimony/
  19. Fortune, "Howard Lutnick's Cantor Fitzgerald and Tether", 24 November 2024, https://fortune.com/crypto/2024/11/24/howard-lutnick-cantor-fitzgerald-tether-stablecoin-2-billion-bitcoin-lending/
  20. NBC News, "Under fire for Epstein ties, Commerce Secretary Howard Lutnick defends visiting his private island", 10 February 2026, https://www.nbcnews.com/politics/congress/howard-lutnick-jeffrey-epstein-island-rcna258333
  21. Reuters (via WHBL), "White House discussing Howard Lutnick's future as Commerce secretary, people familiar say", 12 November 2026, https://whbl.com/2026/11/12/republican-senator-urges-ban-on-chinese-chipmaker-cxmt-from-us-market/