By Nick Catoggio
Thursday, November 12, 2026
Nearly everyone who reads this newsletter also reads The
Morning Dispatch, I presume. (The reverse isn’t true, unfortunately.) So I
shouldn’t need to rehash the Jensen Huang scandal that was ably covered in
Wednesday’s edition.
But if you missed that, and you’ve somehow also missed
the coverage in every other news outlet in America, the long and short of it is
this: The man whose company is almost single-handedly propping up the global
economy and powering America’s advantage in artificial intelligence turns out
to have been shtupping a Chinese spy.
And the president and key players in his Cabinet knew
about it. For a long time. And weren’t all that concerned.
Shocking, right? Who could have guessed that a guy known
for stashing classified documents next to the toilet might not take national security
seriously?
A few hours ago, Nvidia CEO Jensen Huang became former Nvidia CEO Jensen Huang. His dalliance with a
Chinese intelligence asset isn’t the only affair he’s been accused of this week, but
it’s the only one with implications for the future of AI, for American GDP, and
for Donald Trump’s presidency. Huang’s mistress was an executive at Megaspeed,
a tech company based in Singapore that did business with Nvidia. She’s now
accused of using her, er, connection to Huang to acquire Nvidia chips that
couldn’t be sold directly to China due to U.S. export controls and funneling
those chips to Beijing.
It’s an AI version of the Rosenberg scandal, potentially.
The United States has an edge in developing the most innovative and destructive
new technology on Earth, and Jensen Huang might have given that edge away. Not
for ideological reasons this time, but for something much grubbier.
The scandal might not be as bad as it looks. It’s plenty
bad, make no mistake, but I haven’t seen any claim that Megaspeed got hold of
Nvidia’s most advanced chips (aka Blackwell or its successor, Rubin) and
diverted it to China. It’s the H200, an older-generation chip, that they’re alleged to have transferred. That’s still outrageous—but
bear in mind that, thanks to the president, Nvidia was already free to sell the H200 directly to Beijing itself. In return
for granting that permission, the White House secured a 25 percent cut of the sales and a generous $25 million contribution by the company to Trump’s ballroom
a few months earlier.
In fact, according to Reuters, China’s government is actually reluctant to use
the H200s it’s acquired for fear of developing a path dependency on U.S.
technology. Hundreds of thousands of the chips are reportedly piled up in Hong
Kong, awaiting shipment to the mainland, but the powers that be are
slow-walking their importation lest Chinese tech companies end up relying on
them too heavily.
So maybe this isn’t the Rosenberg scandal after all. But
it’s certainly a White House scandal, and it could be a big one.
L’affaire Huang touches all sorts of political
third rails: anxiety about AI, fear of a global order dominated by China,
disgust at Trump’s corruption, resentment toward tech oligarchs who’ve amassed
unfathomable fortunes while doing terrible damage to the social fabric and wider culture. If it turns out that bribes were being paid
to administration officials to overlook Huang’s exposure to Chinese
influence—besides the ballroom “donation,” I mean—that’s slam-dunk impeachment
material.
Even Senate Republicans would have a hard time
rationalizing voting to acquit. Although I’m confident they’d find a way.
In the meantime, though: What did the president know and
when did he know it?
The fall guy.
Actually, we already have some insight into the answer.
Per the New York Times, U.S. intelligence was sniffing
around Megaspeed last year when it discovered Huang’s “close relationship” with
his mistress, whom it suspected of being a Chinese asset. That information was
then sent up the chain. Quote: “Roughly a year ago, Mr. Trump was briefed about
the intelligence findings, which have not been previously reported, and chose
not to do anything with the information.”
A year ago.
The president was allegedly briefed on it again this past May aboard a flight to
Alaska, en route to China, by Marco Rubio. Trump intended to have Huang join
the delegation during its stopover; Rubio apparently saw the political peril in
that, knowing how it would look for the president to have been palling around with
a man diddling a Chinese spy after Huang’s affair was inevitably exposed. No
matter: “Mr. Trump was not particularly moved by what he heard from his
national security adviser, and continued with the plan to pick up Mr. Huang,
the people with knowledge of the events said.”
On Monday the president took questions in the White House
briefing room and was pressed on when he learned about Huang’s dangerous
liaison. Didn’t Rubio circulate a highly classified memo about it at some point?
I’ll have to check with the intelligence people on that, Trump replied,
allowing that the topic might have been broached with him at some point. If it
was, though, “certainly, it didn’t make much of an impact on me.”
That would be like Harry Truman finding out that Robert
Oppenheimer was sleeping with a Soviet agent during the Manhattan Project,
doing nothing about it, and later claiming that the whole thing had slipped his
mind. But then, that’s always been Trump’s approach to being caught red-handed
in a scandal: Simply play it off as no big deal. Act as if there’s nothing to
feel scandalized about and those motivated by partisanship to defend you will
decide there’s nothing to feel scandalized about.
The phone call with Volodymyr Zelensky seeking dirt on
Joe Biden was “perfect.” The gabbing with Billy Bush about grabbing women
by their privates was “locker-room talk.” The $3 billion Trump has made since
returning to office? That was smart stock investments. Doing nothing as China went about
(literally) seducing the head of America’s most strategically important
company? Sure, that happened. So?
How can there be malfeasance if there’s no consciousness
of guilt?
It wouldn’t surprise me if Trump having Huang join the
flight to China despite Rubio’s warning was less a matter of reckless idiocy
than of Machiavellian logic. Freezing out the Nvidia chief would have been seen
in hindsight as proof that the president grasped the magnitude of Huang’s
exposure, making his subsequent refusal to do anything about it that much more
damning. But bringing Huang aboard strengthens the “no big deal” defense (which
isn’t really a defense, of course). If what he was up to was really so
egregious, obviously the president wouldn’t have invited him onto Air Force
One, right?
Scandals are shameful—so if you don’t show shame, there
can’t be a scandal. That playbook has worked for Trump in the past (usually, but
not always), so naturally he’s turning to it again.
Designating a scapegoat is also part of that playbook,
and the White House seems to have settled on one. Commerce Secretary Howard
Lutnick isn’t long for this political world, I fear.
In fairness to the president and his cronies, this Axios report makes it sound like Lutnick really does
bear considerable blame for the Nvidia-Megaspeed clusterfark. He too reportedly
received the Rubio memo about Huang’s affair, and it’s his
agency that’s responsible for blocking sales of key American technology to U.S.
adversaries. Yet “six high-level sources” told Axios that Lutnick has
dragged his feet repeatedly on implementing export controls authorized by
Trump.
Lutnick seems to have bought into Huang’s argument that selling Nvidia chips to
China is better for national security than cutting them off, precisely because
doing so might make the Chinese dependent on American technology. That argument
hasn’t prevailed in the West Wing, though—apart from the big H200 loophole, I
mean—yet he continues to resist Trump’s orders to turn off the tap. Or so those
six, very self-interested “high-level sources” would like us to believe.
Blaming Howard Lutnick for letting business between
Nvidia and Megaspeed proceed feels like blaming
Pete Hegseth for the war in Iran. A serious country wouldn’t have let
either of them within 500 miles of power, and it’s likely true that both have
damaged their respective agencies in ways beyond what the president himself
desired. But if the Commerce Department went on looking the other way as China
quietly went about eroding a key U.S. strategic advantage, culpability
ultimately falls on one man—the same man who gave Hegseth the order to attack.
And that man ain’t Howard Lutnick.
Why wasn’t the president more alarmed by Beijing’s
influence over Jensen Huang? Why didn’t he use the powers available to him to
rein in Nvidia and isolate Megaspeed?
It’s not business, it’s personal.
As usual with Trump, the answer has more to do with the
vagaries of personality than with logic.
Others have already zeroed in on some of those vagaries:
“He admires richer people, like Huang,” journalist John
Harwood wrote, trying to explain the president’s indifference toward the
scandal. “He fears stronger people, like Xi [Jinping]. He thinks cheating on
spouses, like he’s done, is normal. He doesn’t really care about national
security, just himself.”
At The Atlantic, David Graham pointed out that Trump has always trusted his
own instincts when they conflict with U.S. intelligence, as any lowbrow populist confronted
by “elites” with information he doesn’t want to hear would. The president may
have ignored Rubio’s caution in this case because he had a “good feeling” about
Huang or some such nonsense. Or he might have been “worried about the risk to
the economy of any Nvidia turmoil,” Graham speculates, which would also be true
to form. To Trump, an economic slowdown is the sum of all fears. If he thought turning a blind eye to
Nvidia’s black-market sales of chips to China was required to keep the Dow
above 50,000, he’d have covered both eyes.
But the two most important presidential personality
quirks in this matter are also the most obvious. Trump doesn’t much care about
national security (or anything, really) relative to his own interests, and examples
of this abound, in case leaving state secrets by the commode at Mar-a-Lago
wasn’t enough. And he palpably relishes being courted by the richest and most
powerful people in the world, of whom Huang is (or was) one. When the president
rolls out the red carpet for Vladimir Putin or prattles on about his admiration
for Xi, he’s not just mooning over how dreamily authoritarian they are. It’s
that they’re big. The biggest. Yet he can get them to take his calls at
any time, which means he’s big, too.
Trump’s interest in schmoozing movers and shakers and his
lack of interest in national security are actually two sides of the same
personality coin, I think. The president seems to believe that America’s best
defense against the threats it faces are the personal relationships he’s
cultivated with influential people. That’s why the Huang scandal is no big deal
in his mind, I suspect: You don’t need to worry about China stockpiling
Nvidia’s chips because, after all, the president and Xi are “friends.”
Statecraft under Trumpism isn’t business. It’s personal.
Which, superficially, is weird twice over. It’s weird
because the president is often described (with good reason) as “transactional,”
and transactional people tend to be coldly calculating rather than invested in
the warmth of their business relationships. It’s also weird because Trump is
nominally a nationalist and so, one would think, he’d understand intuitively
that foreign leaders with whom he transacts will always prioritize their own
national interests over their relationships with him.
Weird or not, though, he appears to sincerely believe
that the better his personal relations with an adversary are, the less
threatening that adversary is to the United States. Trump’s first-term summits
with Kim Jong Un were premised on the world’s greatest dealmaker somehow
charming a belligerent anti-American communist regime into rapprochement. His
campaign promises that he would end the Ukraine war in a day imagined him meeting personally with Putin and Zelensky and talking them
into peace. He isn’t worried about China invading Taiwan, he says, because his
friend, the dictator, personally assured him that he wouldn’t. (Until Trump has
left office, that is.)
The exception to this “personalist” approach to foreign
policy proves the rule. Iran hasn’t had formal diplomatic relations with the
United States in nearly 50 years, and Trump has had no relationship with either
the former supreme leader or the current one. Even if he tried to build one,
the regime’s revolutionary commitment to anti-Americanism would make it
impossible. So go figure that he resorted to attacking Iran last year and again
this year amid lower-level talks on both occasions that might have
peacefully resolved the standoff over Iran’s nuclear program.
Because Trump couldn’t make “friends” with the Iranians
personally, he didn’t trust diplomacy to disarm the threat. Here, as elsewhere,
he alone could fix it.
‘I am the code.’
Basing policy on personal relationships is weird. But
maybe not that weird under the circumstances.
The president may be a nationalist, after all, but he’s
also a grandiose narcissist with an autocratic streak a mile wide. Case in
point: In September, the Washington Post reported that he had clashed with
the original architect of the new White House ballroom over safety features.
Trump wanted changes to the plans, but the architect feared those changes would
violate the safety code, leaving too few emergency exit routes or
fire-containment measures. To which the president allegedly replied, “I am the
code.”
That’s him all over. Whether it’s turning the ballroom
into a death trap, flying around in a plane from Qatar that lacks security measures, bombing Iran in the belief that it
wouldn’t dare close the Strait of Hormuz, setting trade policy based on personal grudges,
or doing jack squat about Nvidia chips being diverted to China, Trump’s selfish
desires and recklessly high risk tolerance routinely override prudent advice
from aides to take precautions that might protect others. My guess is that when
he was briefed on Jensen Huang’s exposure, he thought, “I know Huang, and I
know Xi, and they both like me, so we don’t need to worry about them doing
anything to damage the United States that would embarrass me.”
He is the code, and if the code permits what Nvidia was
up to, that’s all that matters. I hope the president and his fans enjoy that
prerogative while it lasts, because it’s not going to last much longer.