White House reportedly discussing Howard Lutnick's future as Commerce secretary

With us, the resignation of NVIDIA CEO Jensen Huang over his extramarital affairs has captured the headlines. But while there's another scandal that risks the already diminished reputation of the Trump administration, scrutiny grows over the role of the Commerce Secretary Howard Lutnick. The Trump administration refused to add certain Chinese companies to the banned list. There's a question over whether Trump's man was properly overseeing NVIDIA's exports to China. The suspicion that one of Jensen Huang's mistresses was a Chinese spy thickens this already complicated plot. If NVIDIA's sales of AI chips have given Beijing a competitive edge in a sector that's shaping the future of the whole world, you get the picture how this is developing. Emerald Maxwell has this. After more than three decades as NVIDIA's CEO, Jensen Huang is forced to step down. Huang offered his resignation Thursday after reports of undisclosed extramarital affairs harmed the company's reputation and sent shares plunging. NVIDIA Corporation appointed CFO Colette Kress to replace Huang as interim CEO. According to reports, NVIDIA's co-founder had two affairs, but what made headlines is the one with Alice Huang. She's a former executive at Megaspeed, one of NVIDIA's largest clients. Alice Huang is accused of espionage and illegally shipping its high-tech chips to China. Allegations that have shaken NVIDIA. On Thursday, shares plunged 13% at open. Investors' trust is also broken. NVIDIA shareholders filed a class action lawsuit against him in California, accusing him of failing to disclose information to investors. The market definitely has become more pessimistic in the short run, simply because investors don't really like uncertainties around the AI industry right now, especially when there are different problems like the energy bottleneck and also surrounding whether the industry can be profitable in the short run. On Thursday China's Foreign Ministry said that the espionage allegations are American fabrications and it warned Washington to stop using spy narratives as cover for technology restrictions. Let's go straight to the heart of the matter and bring in Wassim Kone, our correspondent in Los Angeles. Wassim, good evening to you. Huang steps down, tell us more about the fallout. Yeah, you know, listen, there's been genuine shock in Silicon Valley because Jensen Huang is the face of the AI revolution. He is essentially NVIDIA. NVIDIA is Jensen Huang, and he became one of the most valuable companies in the world under his leadership. But it's not just that, you know, there is this personal story that has played such a big role. role in his appeal. He was born in Taiwan, moved to the United States as a young boy, and then served as a dishwasher and a waiter at a local Denny's, a chain, a diner chain in the Bay Area before he came up with the idea with a few others. uh... associates of founding NVIDIA in 1993 and that really gained him over the past thirty years celebrity status in Silicon Valley you know he's very well known for his uh... leather jacket he would draw enormous crowds at any speech that he would uh... hold for example at tech conferences or tech events And it is, in fact, that celebrity status that has given him so much support, even after this sort of disgraceful fallout and disgraceful exit from one of the most valuable companies in the world. Elon Musk, for example, responding to a post on his social media X saying that Elon Musk should hire Jensen Huang. He responded, it would be an honor. The CEO of Binance said it was a mistake for NVIDIA to fire. To force Jensen Huang to resign and that support even extends into the White House with Donald Trump chiming in saying Jensen Huang is a legend and also chiming in into who should be the next CEO of NVIDIA, Donald Trump floating the name of former CEO of Apple, Tim Cook. The question hanging over all of this, Wasim, is did China get an AI advantage due to a lack of oversight of NVIDIA AI chip sales to Beijing, as Wang was, as is suspected, in an affair with a Chinese spy? Yeah, the potential advantage here is maybe access to computing power because NVIDIA's advanced processors, some of the most advanced in the world, are essential for training and running some of the most sophisticated AI models that are being built these days. And that's why the United States essentially aimed to restrict export controls on China to essentially limit access to some of these chips and limit China's ability to accelerate its competitiveness. And so according to this New York Times reporting, which is, again, important to remind our viewers, referring to unnamed senior sources within the U.S. Intelligence Community, they do suspect that Megaspeed, which is the company that Alice Huang was working for, has taken, had a role in diverting some of these NVIDIA chips to China that is circumventing export controls imposed by the United States. As we just heard in that story, Beijing has claimed these are just US U.S. fabrications, but there are also questions about the role of Commerce Secretary Howard Lutnick because According to separate reporting, this time from Axios, that is an online news website, apparently Howard Lutnick had received several classified intelligence warnings about the relationship between Jensen Huang and Alice Huang, and Howard Lutnick had repeatedly resisted efforts to crack down on companies suspected of helping NVIDIA circumvent that export control ban. And there had apparently been several other senior officials who would encourage Lutnick to crack down, on his part. And so that raises questions over whether there were commercial. Diplomatic or even relationship questions that took precedent and were given more importance than U.S. national security questions. Again, it is important to remind viewers that Jensen Huang was a donor to Trump's inaugural fund and to the White House ballroom project. It is phenomenal how someone, one person has so much influence. thank you very much indeed. Obviously, we await answers to that question about China's Advantage on that. Let me give you another question before we go, though. Testifying before Congress, before Thanksgiving, this is going to happen for Huang, isn't it? Does this mean that he'll be exempt from further questions by any newly elected Democratic members? Well, the short answer is no, it won't give him immunity. The committee chairmen who have requested this hearing on Capitol Hill have requested a joint closed door briefing. This will not be one of those televised public hearings. Huang hasn't indicated a preference for the date. They did mention before Thanksgiving and Republicans have also mentioned that they are prepared to subpoena him if he does not cooperate. But again, as you mentioned, there is a big change of political landscape that will come upon Washington. In January, the new Democratic chairs, committee chairs, will have a wide latitude in terms of what kind of questions and investigations they want to open. They can reopen questions. They can ask about Nvidia's dealings with China, the administration's export control. Decisions and what officials knew about this suspected intelligence operation and Democrats will likely be very much. It is a very tangled web. Thank you for helping us try to see through it there. Wassim Kornai, our correspondent in Los Angeles. Thank you, sir, very much indeed.