Commerce Secretary Howard Lutnick appears to be at risk of losing his job after becoming the target of criticism inside and outside the administration for his handling of a company at the center of the Nvidia scandal.
His ouster, if it happens, would have ripple effects on U.S. trade, government-led equity investments and industries far beyond the chip makers at the heart of the controversy.
Lutnick has become a target for failing to blacklist Megaspeed, a Singaporean company suspected of routing advanced Nvidia chips to China in avoidance of U.S. export controls. Jensen Huang resigned as Nvidia CEO this week and acknowledged being unfaithful to his wife after reports he had an affair with a onetime Megaspeed executive. The U.S. is investigating that executive over alleged ties to the Chinese intelligence service.
On Friday, U.S. Treasury Secretary Scott Bessent on CNBC pointed the finger at the Commerce Department for not putting Megaspeed on a list that would have limited its access to U.S. technology. Lutnick plans to testify to the Senate Banking Committee on the issue. Bettors on prediction market Kalshi put 58% odds on Lutnick leaving his post this year.
The White House and Commerce Department did not respond to requests for comment.
Lutnick, the former head of financial services firm Cantor Fitzgerald, has been a point person for President Donald Trump in trade negotiations, crypto policy and other issues that intersect with Wall Street. He's also overseen a huge expansion of the U.S. government's direct equity stakes in private companies.
Lutnick's departure would be a blow to a number of industries that he's advocated on behalf of.
In recent months, Lutnick has inserted himself into trade negotiations between the U.S., Canada, and Mexico to prevent tariffs on steel and aluminum imports from being weakened as part of broader trade deals, noted Beacon Policy Advisors analyst Owen Tedford. That's helped companies like Cleveland-Cliffs and Nucor, whose executives have credited the tariffs for bolstering the steel industry.
He's also been a consistent advocate for crypto firms. Lutnick was one of the cabinet secretaries tasked last year with studying ways to increase the government's crypto holdings as part of Trump's "strategic Bitcoin reserve," and had met with executives as Congress considered passing industry-friendly legislation this summer.
Along with Federal Housing Finance Agency Director Bill Pulte, Lutnick has also been an advocate for selling a chunk of mortgage-finance giants Fannie Mae and Freddie Mac.
Investors in all three of those industries could be at greater risk without Lutnick at the helm.
Lutnick was also a chief architect of Trump's drive to take equity stakes in private companies. But far from putting a damper on those investments, the Nvidia scandal might put the movement into overdrive.
Since January 2025, the U.S. has announced equity investments worth $30.8 billion across 49 deals, including a near 10% stake in Intel Corp., according to the Council on Foreign Relations.
Many of the investments have been to lessen U.S. dependence on China for supplies of rare earths and critical minerals, notes Raymond James analyst Ed Mills. If Trump takes a more hawkish stance on China after the Nvidia scandal, China could retaliate by limiting rare earths shipments, making those kinds of investments even more crucial.
Increased tension with China "puts more pressure on the U.S. to establish its own supply chain and increases the probability that they double down on investments in those businesses," Mills said.
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