Trump stands by Lutnick as Nvidia spy scandal engulfs Commerce

Trump has decided to back Commerce Secretary Howard Lutnick through the espionage controversy swirling around Nvidia and Megaspeed, CNN reported Thursday, citing a White House official. That official said the president has total faith in him, calling Lutnick the most transformative Commerce Secretary in modern history.

The Megaspeed problem had been building for months. Several US government departments pushed to add the company to an entities list well before the story broke, according to reports, but Lutnick slow-walked the decision. Treasury Secretary Scott Bessent eventually confronted him over the holdup.

The fallout has landed hardest on Nvidia. Co-founder Jensen Huang resigned as president, chief executive and board member effective immediately, and the stock dropped more than 14% at Thursday's opening bell. Huang's exit followed reports of two affairs, one involving a former Megaspeed executive suspected of working for Chinese intelligence. Beijing denied the person was a spy, accusing Washington of fabricating espionage claims.

Nvidia moved fast on a replacement. Chief Financial Officer Colette Kress steps in as interim CEO while staying in her finance seat, and the board is hunting a permanent successor among internal and external candidates. It also named Harvey C. Jones as its first-ever chair.

Washington isn't softening on the chip front. US Trade Representative Jamieson Greer told CNBC on Thursday that the US remains concerned about Nvidia and wants the most advanced crown jewel chips kept in the hands of America and its allies.