Trump Vouches for Nvidia Boss as Chip Probe Gets Muzzled

Commerce Department staff investigating a suspected AI chip smuggling ring were told to keep quiet about it, route every request involving Nvidia through their boss, and never mention the company at the center of the case. That's the detail buried in the middle of the Nvidia scandal, and it says more about who runs things than any bedroom revelation could.

The headline story is salacious enough. Nvidia CEO Jensen Huang admitted to an affair with Alice Huang, a former executive at Megaspeed, the Singapore-based data centre company the United States suspects of smuggling AI microchips into China. Alice Huang, who is not related to him, stands accused of working for Chinese intelligence. Nvidia's board announced an investigation on Sunday, November 8, two days ago. Nvidia says it has no reason to believe national security or company secrets were compromised.

Who Has the Power

President Donald Trump didn't wait for the FBI. Speaking at the White House on Monday, he said the agency is looking into it, then handed down his own verdict. "I think he will be in good shape," Trump told reporters. Huang told him he had "absolutely no idea" the woman was an alleged agent. "He said, 'I had no idea that she was a spy,' and I really believe him," Trump said.

The man who commands the Justice Department's attention is publicly vouching for the subject of an investigation. Meanwhile Bloomberg reported that Huang had previously lied about the nature of the relationship.

The pattern runs deeper than one phone call. In late summer 2025, Nvidia general counsel Tim Teter phoned Commerce Under Secretary Jeffrey Kessler, who oversees US chip export curbs, to ask whether the Bureau of Industry and Security was involved in Singapore's detention of Alice Huang. It wasn't. In the weeks that followed, BIS staff were "muzzled," according to people familiar with the matter. They had to route all requests of Nvidia through Kessler or get his approval, a step unique to the chipmaker. They were told not to mention Megaspeed or its Malaysian subsidiary, Speedmatrix, externally. When Teter reached out to staff directly and asked one for a meeting, the employee declined and forwarded the email up the chain. Kessler told them to handle the case by the book. They answered: "10-4. Thank you."

In late 2025, the Justice Department asked BIS to pause. BIS has made no progress since, despite having enough evidence to move forward, the people said. A BIS spokesperson insists the bureau "conducts all enforcement strictly by the book."

What the Numbers Say

Nvidia controls an estimated 80 to 90 percent of the market for the GPUs that run frontier AI models. Its market valuation is US$4.5 trillion, on par with Apple. Shares fell 4.27 percent Monday to $178.67. A stumble that size for a firm that size is a rounding error for the bosses and a tremor for everyone else holding the pension funds.

Bloomberg's analysis of trade records found Nvidia's tabulations to the US government undercounted chips sold to Megaspeed via hardware partners by 50,000 units, worth billions of dollars. Megaspeed's imports of Nvidia products topped $4.6 billion, and it rents Nvidia chips to China's Alibaba from Southeast Asian facilities. Two of eight data centre operators said they didn't have Megaspeed's hardware. Megaspeed remains an official Nvidia Cloud Partner. BIS declined to restrict Nvidia's business with the firm despite calls from senior levels of the Trump administration.

Stephen Wu, founder of Carthage Capital, put the regulatory game plainly: "US export controls restrict where a chip is shipped, not who uses it." Washington bans exports of Blackwell and Rubin GPUs to China, yet eased controls on the H200 this year with a 25 percent US cut of sales. The state, in other words, takes a percentage of the trade it claims to police.

The Accountability Theater

Nvidia's board has formed a committee of independent directors and promised an inquiry overseen by outside counsel. The company paying for the investigation is the company being investigated. Huang apologised to his family, colleagues and shareholders and pledged full cooperation. He's been asked to appear before a closed-door joint meeting of House committees on November 18. Closed-door. Trump is set to meet Chinese President Xi Jinping at the Apec summit in Shenzhen next week.

China's foreign ministry called the reports "groundless speculation, and a smear against China." Alice Huang hasn't commented. Megaspeed denies the diversion allegations.

One case does show how enforcement works downward. In March 2026, federal prosecutors in New York charged Supermicro co-founder Yih-Shyan "Wally" Liaw and two others with diverting servers fitted with restricted Nvidia chips to China. Liaw pleaded not guilty. The pressure lands on mid-level figures and the staff who were told to stay silent, while the trillion-dollar firm at the top gets presidential character references.