Nvidia Scandal Exposes Rift in Trump Cabinet Over AI Chip Smuggling
US Treasury Secretary Scott Bessent publicly blamed the Commerce Department for allowing advanced Nvidia AI chips to leak to China, exposing a rift in President Donald Trump's cabinet. Bessent said his department had pushed for months to block exports to Singapore-based Megaspeed, suspected of smuggling chips to China, but Commerce Secretary Howard Lutnick failed to act. The scandal involves Nvidia CEO Jensen Huang, who resigned Thursday after admitting an affair with Megaspeed's former director, Alice Huang, suspected of spying for Beijing. Lutnick faces congressional hearings, with Democrats demanding answers on why he didn't prevent the chip diversion. Trump was reportedly informed of the affair months ago but kept Huang as an informal AI advisor, while Lutnick, a longtime Trump ally, had once called Huang a "national treasure."