Trump’s Cabinet Is in Disarray Over Nvidia’s Honeypot Disaster

Commerce Secretary Howard Lutnick took it easy on disgraced CEO Jensen Huang. His colleagues aren't happy

There’s a bitter war over trade policy underway in the back rooms of the Trump administration that pivots on an unlikely fulcrum: one tech CEO’s inability to keep it in his pants. 

By now, you’ve likely heard about Jensen Huang, the CEO of Nvidia, one of the largest makers of the chips and technology powering the economic juggernaut of artificial intelligence. Huang was forced to resign earlier this week after the shocking revelation that he had been having an extramarital affair with a woman named Alice Huang — no relation — who U.S. intelligence services think is an asset for the Chinese government. Until his resignation, Huang was one of the most important CEOs in the country, presiding over the world’s most valuable company. He sat near Trump at a state dinner with China in September, and basically had the president on speed-dial.

But where the various money men in Trump’s Cabinet get involved has to do with the mistress, Alice Huang, who also happened to be the leader of a Singaporean company called Megaspeed that was buying up Nvidia chips as fast as it could get them.

The New York Times reports that the Treasury, Defense, and State departments all wanted to put Megaspeed on a trade blacklist for months — even before the Huang honeypot affair had broken — but they weren’t the ones who made the final call. No, that particular blacklist is handled by the Commerce Department, led by Howard Lutnick. Lutnick has been more of a dove when it comes to sanctions policy, advocating against big, broad export restrictions that would, say, block the sale of AI chips to a shell company for the Chinese intelligence services, but also gum up the works for various other countries. And on Nvidia specifically, Lutnik has basically been a trusty friend. The Times also reports that, like Trump, Lutnick has a personal relationship with Huang and has repeatedly gone easy on him when it comes to trade policy decisions like this. 

All of that appears to have royally pissed off the other big money man in Trump’s Cabinet: Treasury Secretary Scott Bessent, whose department had been trying to get Commerce to blacklist Megaspeed for months. This conflict came to a head, Axios reports, in a direct confrontation between the two men in the Situation Room on the Thursday after the midterm elections, after which Lutnick said he would “look into it.” Axios reports that other officials had repeatedly warned one of Lutnick’s deputies, undersecretary Jeff Kessler, about Megaspeed’s risks before the Situation Room clash.

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Bessent publicly addressed the issue on Friday. “You will have to ask them about their internal processes,” Bessent said on CNBC this morning, referring to the Commerce Department refusing to blacklist Megaspeed, effectively throwing Lutnick under the bus. “The real story here should be: Did Nvidia know their client, and was there a robust effort at Nvidia to make sure that there was no leakage and that they were selling to what were obviously pass-through shell companies?”

U.S. Treasury Secretary Scott Bessent blames Commerce Secretary Howard Lutnick over Nvidia chip mess: "Treasury, War, USTR and State were in favor of putting Megaspeed on the entity list for months." pic.twitter.com/0BTlHymwUY

— CNBC (@CNBC) November 13, 2026

Lutnik appears to understand that his role in the Nvidia fallout is going to come under scrutiny. A spokesperson told CNN on Friday that the Secretary had “proactively agreed” to appear voluntarily before the Banking Committee in Congress – which means he will have to face some of these questions directly in the near future.  

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The second part of Bessent’s quote, though, is part of a big question that administration officials are probably asking: How much did Huang or his people know? Did the guy who was calling up Trump onstage at tech conferences know he was sleeping with and selling advanced AI chips to a Chinese spy? It’s not as if Megaspeed’s business was particularly subtle. The Times reports that the company was buying Nvidia’s chips and using them to set up data centers in Southeast Asia that would service Chinese companies, skirting U.S. export controls. The U.S. government was also looking into the company for literally smuggling some of the chips into China directly, which seems like the kind of thing the CEO of Nvidia should have maybe been aware of before he started sleeping with Megaspeed’s top executive. 

Alas, the heart wants what it wants. Scott Bessent’s heart, we can presume, really wants to hit Lutnick over the head with a folding chair. Alice Huang’s heart, it seems, wanted to successfully skirt U.S. regulations on behalf of the Chinese tech industry. And Jensen Huang, well, he just wanted to smooch women and look good in a leather jacket — and it turns out, he had the chips to do that all along.