# Nvidia already forecasts zero China data center sales. The Lutnick fight puts its Asian middlemen at risk

Commerce is weighing four moves, from blacklisting Megaspeed to curbing remote access, that would reach sales Nvidia still books in Southeast Asia.

By 567 Business staff · 567 Business
Published: 2026-11-13T17:35:27.462415Z
Updated: 2026-11-13T17:35:27.462415Z
Canonical: https://567business.com/news/lutnick-commerce-nvidia-china-exposure-megaspeed-what-investors-watch

Cite citation_url. Preserve source links, dates and qualifications. date_modified is an edit date, not proof that every claim was rechecked. Third-party images and quoted material retain their own rights. Resolve relative links against https://567business.com/news/lutnick-commerce-nvidia-china-exposure-megaspeed-what-investors-watch.

Nvidia's own forecast already assumes it sells no data center chips in China. So the scrutiny of Commerce Secretary Howard Lutnick threatens little of Nvidia's next quarter. What it threatens is the upside investors had priced in, and the company's room to keep selling through Asian middlemen.

Lutnick's department decides which Nvidia customers get licenses and which go on the Entity List, the U.S. trade blacklist. After Jensen Huang resigned on Nov. 12, lawmakers in both parties want to know why Commerce never listed Megaspeed, a Singapore customer that U.S. officials suspect of moving chips to China. Lutnick has agreed to testify to the Senate Banking Committee on Dec. 10, [CBS News reported](https://www.cbsnews.com/news/howard-lutnick-scott-bessent-nvidia-megaspeed-testimony/). Nearly every proposal now on the table would tighten the rules, not loosen them.

## China is already out of the forecast

In August, Nvidia guided to $108 billion in revenue for the quarter it reports on Nov. 17. Its [results release](https://investor.nvidia.com/news/press-release-details/2026/NVIDIA-Announces-Financial-Results-for-Second-Quarter-Fiscal-2027/default.aspx) said: "NVIDIA is not assuming any Data Center compute revenue from China in its outlook." On the call, finance chief Colette Kress, now interim CEO, said H200 shipments to China came to "less than 1% of our total data center revenue," according to the [transcript](https://www.fool.com/earnings/call-transcripts/2026/08/31/nvidia-nvda-q2-2027-earnings-call-transcript/). She added that those shipments were "dilutive to corporate gross margins."

```chart
type: column
title: Nvidia's next quarter is forecast at $108 billion with zero from China data centers
note: Quarterly revenue in billions of US dollars; fiscal Q3 2027 is company guidance, plus or minus 2%
prefix: $
suffix: B
source: [Nvidia Q2 fiscal 2027 results, Aug. 26, 2026](https://investor.nvidia.com/news/press-release-details/2026/NVIDIA-Announces-Financial-Results-for-Second-Quarter-Fiscal-2027/default.aspx)
highlight: Q3 FY27 guide
---
Quarter | Revenue
Q2 FY26 | 46.7
Q2 FY27 | 96.2
Q3 FY27 guide | 108
```

That is why Bernstein analyst Stacy Rasgon, who cut his price target from $400 to $200 and downgraded the stock, wrote that "we aren't really worried about near-term impacts to the business," according to [Yahoo Finance's live coverage](https://finance.yahoo.com/technology/live/nvidia-live-updates-following-jensen-huangs-resignation-as-ceo-allegations-of-a-third-affair-emerge-195535310.html). The shares fell as much as 13% on Nov. 12 before closing down 4.3%, [ABC News reported](https://abcnews.com/Business/nvidia-stock-sinks-after-ceo-jensen-huang-resigns/story?id=138076153). They were down about 17% from a year earlier.

## Where the real money sits

The bigger exposure is the gray zone between "China" and "everywhere else." Megaspeed bought more than $4.8 billion in Nvidia chips since June 2024, according to a [letter from Sens. Elizabeth Warren and Chris Coons](https://www.banking.senate.gov/imo/media/doc/20261111_warren_coons_letter_to_wh_commerce_state_re_nvidia_record_retentionpdf.pdf) that cites press reports. That is about 5% of one recent quarter's revenue, spread over two years. Megaspeed says it takes export compliance "extremely seriously." No court or agency has found that it broke the law.

The worry is that Megaspeed is not alone. In March, a Justice Department indictment accused three people tied to Supermicro of sending about $510 million in servers with restricted Nvidia chips to China through shell companies, [Sens. Jim Banks and Warren noted](https://www.banking.senate.gov/newsroom/minority/senators-banks-and-warren-urge-commerce-secretary-lutnick-to-suspend-or-reconsider-nvidia-export-licenses-amid-supermicro-chip-diversion-indictment). They asked Commerce to pause Nvidia licenses for Malaysia, Thailand, Vietnam and Singapore too. Southeast Asia is where tighter rules would bite into sales that Nvidia still books.

## The decisions on Lutnick's desk

Four pending choices at Commerce would affect Nvidia's sales. Each is now under bipartisan pressure.

| Decision | Status | What it would hit |
| --- | --- | --- |
| List Megaspeed | Backed by 4 agencies, per Bessent | One large Singapore buyer |
| Remote-access rule | "Actively considering," BIS says | Chinese use of chips in Asian data centers |
| Affiliates rule | Paused to Jan. 10 | Subsidiaries of blacklisted firms |
| H200 license pause | Demanded by House Democrats | Licensed China sales |

Sources: [CBS News](https://www.cbsnews.com/news/howard-lutnick-scott-bessent-nvidia-megaspeed-testimony/), [New York Post via Yahoo](https://www.yahoo.com/news/politics/articles/commerce-dept-lutnick-kessler-under-185106389.html), [Yahoo Finance](https://finance.yahoo.com/markets/article/jensen-huangs-spy-scandal-may-cost-nvidia-the-china-chip-fight-it-was-winning-121310306.html), [House Foreign Affairs Democrats](https://democrats-foreignaffairs.house.gov/wp-content/uploads/2026/11/letter-to-commerce-on-ai-chip-export-to-chinafinal.pdf).

Commerce has not added anyone to the Entity List since Oct. 9, 2025, by Yahoo Finance's count. Axios reported, citing unnamed sources, that Lutnick warned the president new controls "will start a trade war with China." Commerce denies parts of that account and says it has charged several chip-smuggling cases worth billions of dollars. A White House official told Bloomberg that Trump "maintains complete confidence" in Lutnick.

There is also the 25% charge on licensed H200 sales, which top Democrats on the tax committees now call an unconstitutional export tax. 567politics explains that fight in [its story on the H200 detour](https://567politics.com/news/nvidia-h200-25-percent-cut-export-tax-constitution-wyden-neal-november-2026). Kress has already said the China shipments dilute Nvidia's gross margins.

## What to watch

The calendar is short. Nvidia reports on Nov. 17, with Kress expected on the call. House Democrats want written answers from Commerce by Dec. 1. Lutnick testifies on Dec. 10. The affiliates rule pause ends Jan. 10.

The key line on Nov. 17 is not China revenue, which is near zero. It is whether Nvidia changes how it describes sales to Singapore, Malaysia and other hubs, and whether it warns about any customer that Commerce might list. For background, see our [timeline of the Megaspeed affair](/news/nvidia-spy-scandal-timeline-alice-huang-megaspeed), our report on [Megaspeed's promised chip inventory](/news/megaspeed-nvidia-chip-inventory-us-export-control-review) and our story on [Huang's resignation](/news/jensen-huang-resigns-nvidia-colette-kress-interim-ceo).