Reports say Lutnick delayed Trump's Nvidia chip crackdown three times; the bill lands on Oracle
Trump backed Lutnick as "transformative" hours after Jensen Huang's exit, even as Axios and the FT report Commerce delayed the chip-diversion crackdown and the Megaspeed blacklist. The loophole is priced into Nvidia at 14x earnings; the bill will land on Oracle.
Vincent Jiangtwo-minute read
The White House picked its man hours after Nvidia lost its chief
Jensen Huang resigned as Nvidia−5.64% — Nvidia, down 5.64 percent today CEO on Thursday after revelations of an affair with Alice Huang, a Singapore data-center executive suspected of being a Chinese spy 2. Within hours, a White House official said Trump maintains "complete confidence" in Commerce Secretary Howard Lutnick, calling him "the most transformative Commerce Secretary in modern history" 12. That is a strong sentence to publish the same week two outlets reported Lutnick's department sat on the very crackdown at the center of the scandal.
Three sign-offs, three delays
Axios reports Trump approved restrictions on companies suspected of diverting Nvidia chips to China at least three times in 2026, and Lutnick delayed each one; the controls were still not in effect when the report published 7. In a November 5 Situation Room meeting, Treasury Secretary Bessent challenged Lutnick over inaction on Megaspeed, the Singapore firm suspected of funneling more than $4 billion of Nvidia chips to China, and the Financial Times reports Commerce also delayed adding Megaspeed to the Entity List 17. Singapore, meanwhile, declined to prosecute Alice Huang for lack of evidence and merely barred her from re-entering the country 5.
Zero lost sales, one open loophole
Chris McGuire, a former NSC China official now at the Council on Foreign Relations, says export controls have cost Nvidia "exactly zero sales" 3. China including Hong Kong brought Nvidia $19.7 billion of revenue in the year ended January 2026, down from $25.0 billion, and guidance now assumes no China data-center compute revenue at all 3.
Official China revenue fell to $19.7 billion while $80 billion of chips flowed to Southeast Asia
The official China number is small; the loophole next door is four times bigger
Data
| Value | |
|---|---|
| China rev, FY to Jan 2025 | $25B |
| China rev, FY to Jan 2026 | $19.7B |
| Chips to SE Asia, 2026 | $80B |
But $80 billion of AI chips flowed to Singapore, Thailand and Malaysia this year, roughly half of all AI chips shipped outside the US, much of it rented to Chinese buyers through cloud deals 3. Congress is likely to attach chip provisions to this year's defense bill, and Commerce's rule extending controls to seven more countries could come this month 32.
The payer is not Nvidia
Sold-out Nvidia at 14x forward earnings can find other buyers for any chip a Chinese renter loses 3. Oracle−0.88% — Oracle, down 0.88 percent today cannot. Its consensus path to $132 billion of fiscal-2028 revenue, up from $67.4 billion, leans on Chinese cloud offtakers, and the administration has already forced it to cancel a $7 billion Tencent deal covering about 100,000 Nvidia chips in Southeast Asia 36. Chinese AI firms are now scrambling for overseas capacity, and Alibaba−6.76% — Alibaba, down 6.76 percent today shares fell 6.83% on the tighter-curbs fear 4.
Oracle must nearly double revenue by fiscal 2028 to hit consensus
- Oracle revenue
- Estimate
Data
| Oracle revenue | |
|---|---|
| FY2022 | $42.4B |
| FY2023 | $50B |
| FY2024 | $53B |
| FY2025 | $57.4B |
| FY2026 | $67.4B |
| FY2028 consensus (estimate) | $132B |
The enforcement gap is priced into Oracle. Watch whether Commerce's rule lands this month and whether Lutnick survives his own subpoena risk 23.
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More about NVIDIA
NVDAFiscal Q2 2027Revenue rose 106% to $96.2B, 92.5% of it from Data Center, “driven by the ramp of our Blackwell Ultra infrastructure”. Gains on equity stakes of $7.8B lifted net income to $59.7B.
Show as a table
| Line | Value |
|---|---|
| Revenue | $96.2B |
| Gross margin | 75.0% |
| Operating margin | 66.2% |
| Net income | $59.7B |
| Hyperscale | $48.7B |
| AI clouds & enterprise | $40.3B |
| Data Center | $89.0B |
| Edge Computing | $7.2B |
| Gross profit | $72.1B |
| Cost of revenue | $24.1B |
| Other income | $7.8B |
| Operating income | $63.7B |
| Operating expenses | $8.4B |
| Tax | $11.8B |
| R&D | $7.1B |
| SG&A | $1.4B |
