Lutnick’s Longtime Friendship With Trump May Not Save Him

President Donald Trump is again facing pressure over his Commerce secretary and longtime friend Howard Lutnick as the department and its leaders face mounting bipartisan criticism in the wake of the Nvidia scandal, according to multiple current and former officials.

Although Lutnick has weathered criticism previously — including over his ties to deceased sex offender Jeffrey Epstein — he is now facing the most intense scrutiny of his nearly two years as Commerce secretary as Republican and Democratic lawmakers call for him to testify about his department's handling of Nvidia and national security risks around China gaining access to U.S. chips. Sen. Tim Scott (R-S.C.) requested Lutnick to voluntarily appear before the Senate banking committee, which he chairs, in a Thursday night letter.

And he’s facing criticism from within the administration, too, for a close relationship with Nvidia CEO Jensen Huang they say resulted in lax oversight of the chipmaker. Huang resigned Monday amid the scandal.

Seven current and former administration officials said that the seriousness of the allegations makes this episode substantially different from past efforts to undermine Lutnick. But even some who believe the controversy should cost Lutnick his job are skeptical Trump will turn against his longtime friend, given the president's own involvement in decisions about chip exports to China. The officials were granted anonymity to speak candidly about private conversations and assessments.

“I don’t know if this is necessarily the straw that’s going to break the camel’s back,” said an administration official with knowledge of the relationship between Lutnick and Trump. “POTUS himself was just too directly involved for this to be an easy, ‘Lutnick is the scapegoat.’”

The scrutiny around Nvidia has escalated far beyond the tech company, roping in the Trump administration just days after Republicans were wiped out during the midterms in part because of the nationwide data center buildout driven by the AI boom. Lutnick’s critics — including GOP lawmakers and other China hawks in the administration — are homing in on his laissez-faire approach to tech, and Lutnick’s fate has major implications for the administration’s broader AI policy.

“This situation is a complete and utter disaster and perfectly encapsulates the last one-and-a-half years of working with Commerce,” said another senior administration official.

At the center of the controversy is Megaspeed, a Singapore-based firm that the U.S. government has examined for helping divert Nvidia's advanced chips to China. Huang reportedly had an affair with a Megaspeed executive suspected of being a Chinese spy. Lutnick reportedly resisted pressure from administration officials to put the company on a U.S. trade blacklist.

“Unfortunately the more we learn, the more concerned I am about the Department of Commerce, Secretary Lutnick defying President Trump’s orders on Blackwell chips, so we need to investigate that,” Sen. Jim Banks, a Republican on the Senate Banking Committee, said in reference to the Nvidia-produced chip. “I’m hoping that Secretary Lutnick will come in and testify before the Banking Committee soon and help us get to the bottom of it.”

Sen. John Kennedy (R-La.) said that if Lutnick doesn’t voluntarily testify before lawmakers, he should be subpoenaed.

Trump and Lutnick have known each other for at least three decades, becoming acquainted at charity events around New York City and bonding after the Sept. 11, 2001, attack on the World Trade Center that killed 658 members of Lutnick’s staff at the financial firm Cantor Fitzgerald, including Lutnick’s brother. Trump often runs ideas past Lutnick, and the two have been known to grab ice cream down at Mar-a-Lago.

That longstanding relationship has helped save the Commerce secretary in the past, including when he came under fire for his role in orchestrating the president’s so-called Liberation Day tariffs in the spring of 2025.

A White House official described Lutnick as “a champion of President Trump’s America First trade and tariff policies” and said the president “maintains complete confidence in the secretary and his ability to carry out the position as the most transformative Commerce Secretary in modern history.”

Some current and former officials are also looking to Jeffrey Kessler, the Commerce undersecretary for industry and security, as a potential casualty of the scandal.

Kessler, whose office oversees sensitive technology exports, has been at the center of reports that he halted an investigation into Megaspeed after Nvidia intervened. He has long faced criticism for slowing the work of an agency designed to help manage the flow of chips to China. But former officials and people close to the agency stress that his power is limited to Lutnick’s direction. They anticipate he could be a “fall guy” for deep-rooted issues with the department that they argue are the responsibility of the Commerce secretary.

“If there is a fall guy, Kessler makes a lot of sense,” said a former Commerce Department official. “The president and Lutnick are very good friends and have been for years. I don’t think he would take anything out on his friend. I imagine there would not be an issue in making Kessler the issue.”

But several people with knowledge of the department's operations questioned whether Kessler could reasonably shoulder the blame for decisions that ultimately rested with Lutnick, who they say maintained unusually tight control over his subordinates.

“He doesn’t make any decisions without Lutnick’s expressed written consent,” the official added. “They very much all wait in a line outside Lutnick’s office to talk to him, as if it’s a professor with office hours.”

Others questioned whether Kessler’s departure would help protect Lutnick, given the severity of a scandal that has already brought down a giant of the tech industry and pushed down the stock of one of the world’s most valuable companies by 8 points in just five days.

In a statement, a BIS spokesperson said Lutnick and Kessler “have a strong working relationship, and both are honored to serve under President Trump to his vision to Make America Great Again.”

Gabby Miller contributed to this report.