The top Democrats on the Senate Finance and House Ways and Means committees have launched an investigation into the Trump administration's decision to allow Nvidia to sell its advanced H200 chips to China, demanding the Commerce Department preserve all related records.
Senator Ron Wyden (D-Ore.) and Representative Richard Neal (D-Mass.) sent a letter to Commerce Secretary Howard Lutnick on Thursday, requesting documentation on what they call a "scheme to approve and tax exports" of Nvidia's AI chips to Chinese firms. The probe follows the resignation of Nvidia CEO Jensen Huang amid a Chinese spy scandal.
Huang, once a key Trump ally in Silicon Valley, admitted to an affair with Alice Huang, a former executive at Singapore-based cloud firm Megaspeed, who is suspected of being a Chinese intelligence asset. The revelation has intensified scrutiny on the administration's relationship with the tech executive and its handling of chip export controls.
After initially restricting Nvidia's H20 chip sales to China, the Trump administration reversed course last summer, permitting sales in exchange for a 15% revenue cut. Late last year, the administration also approved the more powerful H200 chips for a 25% cut, a move the Democrats argue exceeds presidential authority.
"Congress wrote Section 232 to give the President a tool to take action against imports he has determined to pose a national security threat; Trump's use of the statute appears to have done the opposite, undermining U.S. national security and putting Americans at risk," Wyden and Neal wrote.
The lawmakers cited a New York Times report revealing that the Commerce Department approved dozens of Chinese companies to handle Nvidia's H200 chips, some with ties to sanctioned entities. They also noted the department paused a separate investigation into Megaspeed regarding potential smuggling of AI chips to China, passing the case to the Department of Justice, though neither agency confirmed the transfer.
"There appears to be a profound lack of due diligence in Commerce's process for approving these Chinese buyers of Nvidia chips—which is especially concerning in light of reports that Commerce suspended, following outreach from Nvidia, a separate investigation into Nvidia customer Megaspeed," the lawmakers wrote.
Axios reported that Lutnick stalled a directive from Trump and other agencies to crack down on firms suspected of diverting Nvidia chips. The Democrats' letter also criticizes the administration for "masking an unconstitutional export tax as a national security tariff action—benefitting both Nvidia and the Chinese government."
Lutnick has been instructed to preserve all records related to the H200 decision. The investigation adds to growing congressional pressure on the administration's chip export policy, with demands for Lutnick to testify over the export loophole. The fallout from Huang's departure continues to reverberate, as lawmakers seek more answers from Nvidia.
