THE MOST SALACIOUS PART of the Nvidia story is the apparent trap that ensnared the company’s founder, Jensen Huang, and ultimately led to his resignation on Thursday.
But much more scandalous than Huang’s business) It’s the apparent cover-up of a Trump administration so eager to protect its friends and so eager to boost the stock market that it was willing to sacrifice American interests.
In other words, the Horndog might just make headlines. But the real story lies in how the Trump administration handles the deals. all of America’s economic security.
It is one of the biggest national security scandals in decades. It could also cause serious economic damage, as it would harm our domestic AI industry and boost China’s. Heads. Should. To roll.
As you’ve probably already heard, Huang had an affair with a woman that U.S. intelligence suspects was a Chinese spy. The administration knew Huang was compromised. Donald Trump did it too. The president has been warned at least twiceincluding once just before picking up Huang on Air Force One en route to Beijing. And yet the administration did nothing.
In fact, worse than nothing: those responsible circumvented American policy more favorable to Nvidia and China, and to allow the former to more easily supply the latter.
Why did Trump do this? Charitably, he was persuaded by Huang’s pleas to relax export controls on Nvidia’s chip sales to China. For example, in May 2025, the administration announcement it would not enforce or remove Biden-era restrictions on exports of advanced chips to many countries, including potential transit points for reshipments to China. The Commerce Department also appears to have authorized chip sales to companies that may not exist (or which exist, but are under sanctions).
Commerce too interrupted an investigation into one of these shell companies – Megaspeed, the company once run by Huang’s lover, alleged Chinese agent Alice Huang – apparently after an investigation by Nvidia. And Commerce refused to put Megaspeed into service. trade blacklist it would restrict its access to U.S. technology, despite recommendations from the intelligence community and White House officials, based on concerns that it is a front for the Chinese government. As of Thursday, Nvidia still lists Megaspeed as a “cloud partner» on its website.
In other words, even as Trump and his lackeys claimed that the United States dared not regulate AI because coercing American technology companies might allow China to “win” the AI race, the administration turned a blind eye to sales of critical AI chips to an apparent Chinese spy. In many ways, these export controls – first put in place under Trump 1.0, then extended under Biden– had become ornamental.
The question is: why would an administration populated by so-called China hawks look the other way?
We’re not sure, but some information seems relevant to answering this question.
Huang has, shall we say, a very warm relationship with Trump, who continued to praise Huang even after resigning from the company. “Nvidia”donated» $25 million for Trump’s ballroom, tied for the largest amount donated. And in April 2025, Huang attended a $1 Million Per Plate Candlelight Dinner at Mar-a-Lagowhere he reportedly persuaded Trump to postpone planned restrictions on chip sales to China.
But even without a seven-figure entry fee, Huang and Trump talked on the phone all the time, according to journalists who cover Nvidia. Trump likes winners, and until recently, Nvidia was the most valuable company in the world. So Huang was a nice friend to keep.
Trump also seems to imagine doing business with Nvidia.
You may recall that when Trump allowed Nvidia to sell its powerful H200 chips to China, he imposed a condition: that the The United States gets a share. Chips made in Taiwan had to pass through the United States before being shipped to China so Trump could collect his 25% tariffs. As for what happened to those chips once they ended up in China, Trump doesn’t seem too concerned: he also considers himself a close personal friend of Chinese President Xi Jinping.
Finally, the AI boom is currently underpinning much of the economy and stock market: ten stocks with heavy exposure to AI account for about 40% of the total market capitalization of the entire S&P 500. Want to keep the gravy train going? That means keeping the entire industry strong – and the industry, in turn, is crucially dependent on Nvidia.
Nvidia’s chips are key components of data centers around the world. They are used to train AI models managed by large hyperscalers (Google, Amazon, Microsoft, etc.). And Nvidia’s relationships with other companies in the industry are even more incestuous: The company is not only a supplier of the struggling AI cloud platform CoreWeave, for example; it is also one of the largest shareholders and is also a major customer of CoreWeave. This is the “circular financing” which you may have heard of. Nvidia has been nicknamed the “central bank” of AI development for good reason. In addition to designing chips, it guarantees leases, guarantees debt, and buys stakes in many of the companies it sells to. Even electricity companies can’t escape Nvidia’s orbit.
The result is that Nvidia and Huang had a huge financial stake in being able to sell to more customers, including in China. But so was anyone who might have feared that Nvidia’s reduced sales — or worse, the revelation of its role in a spying scandal — could destabilize the entire AI industry and, by extension, the stock market as a whole.
Not that anyone in government can prioritize stock market performance over American security.
— When Huang testifies before Congress later this month, as is currently the case expected— lawmakers should focus their questions on conversations he had not only with Trump but also with Commerce Secretary Howard Lutnick. If recent report is correct, Lutnick’s behavior could be described as either laziness or outright insubordination. It would also be worth asking why Nvidia abruptly changed the way he reported his sales so it no longer disclosed Singapore’s income. (Megaspeed is a Singapore company.)
– THE Economist suggests that this could be the the most expensive deal in historybecause it wiped out maybe half a trillion dollars of Nvidia’s market cap.
— The Commission for a Responsible Federal Budget was follow up how well the economic projections of the White House Council of Economic Advisers over the past two years have matched reality. It turns out — you might want to sit down for this — that the administration’s forecast was pretty rosy.
— The Democrats’ solution to high housing prices is this. . . subsidize demand.
— Beef prices won’t be coming down anytime soon either.
— Interesting observation of a new Foreign Affairs article on the “luxury of children”: “The richest and most educated households in the United States and other advanced economies now tend to have more children than the poorest and least educated households, reversing a trend that has lasted for centuries. »
—Kalshi a separate paths with Donald Trump Jr., who was a paid advisor to the company. I interviewed Tarek Mansour, CEO of Kalshi, at a recent event at the Economic Club of New York. When I asked him about his company’s relationship with Don Jr., Mansour responded that the president’s eldest son was hired because he had a large following on social media, and that the hiring was not a “political decision.”
Gn bussni
