Democratic lawmakers launched an inquiry on Thursday into the Trump administration's management of Nvidia's chip sales to China. That same day, the company removed its CEO Jensen Huang, who also committed to testify before a separate set of Republican-led Congressional committees. Huang was ousted from the company he founded after admitting to an extramarital affair amid reports of a relationship with a woman accused of being a Chinese spy. He has since faced accusations of additional affairs involving Nvidia employees.

The alleged Chinese spy, Alice Huang, served as an executive at Megaspeed, a Singapore-based Nvidia customer that U.S. officials suspect of helping funnel advanced Nvidia chips into China. The Democratic inquiry is being led by Rep. Richard Neal (D-Mass.), the top Democrat on the House Ways and Means Committee, and Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee. As the minority party, they can pose questions but cannot compel answers. Their striking letter to Commerce Secretary Howard Lutnick requests that the department preserve records concerning an arrangement they view as questionable and, they allege, illegal.

"The scheme worked like this," the letter explains. President Trump agreed to permit sales of Nvidia's H200 chips to China provided the chips, manufactured by Taiwan, were first shipped to the United States. Upon arrival, Trump imposed a tariff "effectively taking a cut of Nvidia's sales to China through what appears to be an unconstitutional export tax system," according to the letter. The Commerce Department, under Lutnick, then issued an export license. Notably, the revenue-sharing deal between Trump and Nvidia was public knowledge. In August 2025, both Nvidia and AMD agreed to share 15% of their revenue from chip sales to China with the U.S. government as part of an arrangement to secure export licenses, the AP reported at the time.

However, the letter raises questions about why Lutnick continued allowing Megaspeed to purchase chips even after reportedly being informed by U.S. intelligence of suspicions regarding Alice Huang and Jensen Huang's relationship with her. It also questions why the department reportedly approved other Asian companies to buy Nvidia chips "with no physical presence at their listed addresses." The inquiry therefore targets the administration, not just Nvidia and Huang.

The letter further examines how Nvidia's donations to Trump's projects may have 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. The implication appears to be a question of whether Trump used his knowledge of the affair to secure donations from Nvidia. Interestingly, 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 afterward, the executive "totally changed."

This Congressional investigation into Nvidia's China sales and its dealings with Trump is the second one so far since news of the alleged spy affair emerged. The Republican-led group includes leaders from the House Select Committee on the Chinese Communist Party, the House Committee on Foreign Affairs, and the House Intelligence Committee. That group has demanded that Huang appear before them and testify in a closed-door session. They had threatened to subpoena him if he did not voluntarily agree. On Thursday, following his resignation, he agreed.