U.S. Commerce Department testimony agreed as Nvidia chip export scrutiny deepens

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Highlights

Nvidia's ousted CEO Jensen Huang resigned after admitting to an affair with a Megaspeed executive, whose company bought over $4.8 billion in Nvidia AI chips in two years.
The Senate Banking Committee has summoned Commerce Secretary Lutnick and Nvidia leadership for Dec. 3 and Dec. 10 hearings about Nvidia chip exports to China and national security concerns.
Bipartisan lawmakers are pressuring the Commerce Department over inadequate export controls and alleged loopholes enabling advanced U.S. technology sales to Chinese entities including those with military ties.

Senate hearings focus on export control oversight

As first reported by CNBC, citing NBC News, Lutnick agrees to appear voluntarily before the Senate Banking Committee after Chair Tim Scott summons him amid concerns that Nvidia could have supplied advanced artificial intelligence chips to Chinese companies. The committee is seeking answers on the Department of Commerce's role after Lutnick and ousted Nvidia CEO Jensen Huang both receive letters on Thursday evening requesting testimony at separate hearings scheduled for Dec. 3 and Dec. 10.

Kristen Eichamer, a spokesperson for Lutnick, tells NBC News that the commerce secretary has proactively agreed to testify and address lawmakers' questions. The letter to Lutnick asks him to appear regarding recent public reports about Nvidia and the Commerce Department's role that raise national security concerns.

Huang acknowledges an affair with an executive at Megaspeed, a Singapore-based company that has bought more than $4.8 billion of advanced Nvidia AI chips over the past two years. The scandal, alongside reports of a separate affair with a senior Nvidia executive, leads to his resignation on Thursday.

Bipartisan pressure builds over China chip policy

Lawmakers in both parties are intensifying criticism of the Commerce Department's approach to chip restrictions and questioning whether export controls are tight enough to prevent advanced U.S. technology from reaching China. The scrutiny extends beyond Nvidia to whether the department closes loopholes and adequately reviews sales involving entities with links to the Chinese government, military or sanctioned groups.

Senator Jim Banks says on Fox News that Lutnick appears to have used loopholes to allow some chip sales to occur. Senator Elizabeth Warren, who is set to chair the Senate Banking Committee from January, says Lutnick and Under Secretary Jeffrey Kessler must explain why export control loopholes remain open and act to ensure advanced technology is not supporting China's military.

In a joint letter published Wednesday, Warren and incoming Senate Foreign Relations Chair Chris Coons say all documents relating to Nvidia chip exports to China must be preserved. Senator Ron Wyden and Representative Richard E. Neal also tell Lutnick they are investigating approvals for Nvidia sales to companies with links to the Chinese state and military, while Representative Brian Mast says Congress needs to investigate the Commerce Department's role in approving AI chip exports to China, although he adds that he still has confidence in Lutnick.

Pressure on President Donald Trump's administration is also growing after it declines to add more than 100 companies identified as national security risks to a trade blacklist, including DeepSeek and CXMT, Reuters reports in June. Lutnick's long relationship with Trump is adding a political dimension to the hearings as Congress examines how export policy is enforced.

Previously, we outlined the main factors behind Nasdaq 100 volatility tied to AI supply chain worries and higher financing costs.

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