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US lawmakers push tougher AI chip export curbs on China after Nvidia-Jensen Huang scandal
US lawmakers push tougher AI chip export curbs on China after the Nvidia scandal, with new bills seeking greater oversight of sensitive technology sales.
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US lawmakers are speeding up efforts to restrict the export of advanced artificial intelligence (AI) chips to China following the recent scandal involving Nvidia founder Jensen Huang and a woman suspected of having links to Chinese intelligence.
Both Democrats and Republicans are supporting several proposed bills that aim to make it harder for sensitive US-made AI chips to reach China and other countries.
Nvidia scandal puts China chip exports under scrutiny
The proposed laws would also give the US Congress more power to review chip export approvals and potentially block deals that have already been cleared by the Trump administration, according to The Financial Times.
The political controversy surrounding Nvidia has increased pressure on lawmakers to tighten export rules. The issue has gained attention after questions were raised about how Nvidia chips were allowed to reach Singapore-based company Megaspeed, which is suspected of helping move chips to China.
Owen Tedford, a senior research analyst at Washington-based consultancy Beacon Research, said the scandal has given these proposals fresh support in Congress. He said there was a clear increase in momentum for the legislation following the controversy.
Jensen Huang had earlier pushed for easier export rules so that Nvidia could sell more of its advanced AI chips overseas. However, he resigned earlier this week after revelations that he had extramarital affairs, including one with a woman suspected of having links to Chinese intelligence, according to The Financial Times.
The woman, Alice Huang, was an executive at Megaspeed, a Singapore-based company that buys Nvidia products. She is suspected of working for Chinese intelligence, according to the report.
US authorities have been investigating Megaspeed for more than a year over suspicions that the company was smuggling advanced Nvidia chips to China. The controversy has raised questions about whether US export controls are strong enough to prevent advanced technology from reaching China. Lawmakers are now demanding stronger checks on companies and the movement of AI chips.
Tedford said Nvidia might want to move past the controversy, but Washington lawmakers were not ready to forget the issue. He said the scandal had made Congress more determined to examine the company's activities, according to The Financial Times.
Nvidia's advanced chips are important because they are used to train some of the world's most powerful AI models. AI companies such as OpenAI and Anthropic use Nvidia technology to develop their models.
Supporters of tougher export restrictions believe preventing China from accessing these chips is important for protecting America's technological advantage. They fear that China could use the technology to develop more advanced AI systems and strengthen its capabilities.
US bill targets China’s access to AI chips through cloud services
Although several proposals to tighten chip export rules were already moving forward in Congress, the Nvidia controversy has given these efforts a major push. One of the proposed laws is the Remote Access Security Act. It aims to stop Chinese companies from accessing advanced AI chips located outside China through cloud computing services.
This proposal is important because companies may be able to use powerful chips remotely through cloud services even when they are not legally allowed to purchase the physical chips themselves.
The bill would therefore close a possible gap in existing export rules by restricting Chinese companies from accessing such chips through overseas cloud services. Three senior Republican lawmakers on Friday urged Congress to immediately pass several bills aimed at tightening restrictions on AI chip exports, according to The Financial Times.
The lawmakers are John Moolenaar, Brian Mast and Rick Crawford. They lead House committees dealing with China, foreign affairs and intelligence, respectively.
The three Republicans also wrote to Jensen Huang, Nvidia General Counsel Tim Teter and Jeffrey Kessler, the Commerce Department official responsible for overseeing export controls. They requested that the three appear before Congress and answer questions about the controversy.
In their letter, the lawmakers said they wanted to understand how far US national security had been put at risk because of the situation involving Nvidia and Megaspeed. They also described the controversy as an example of why Congress needed to pass four proposed bills immediately. These measures are aimed at giving lawmakers greater oversight of sensitive technology exports.
US lawmakers push AI chip curbs through defence spending bill
The proposed restrictions have also received support from senior political leaders. Outgoing House Speaker Mike Johnson, a Republican, and Hakeem Jeffries, who is expected to become the next House Speaker, have backed several of the measures. Lawmakers are considering adding these proposals to the final version of the annual US defence spending legislation, known as the National Defense Authorization Act (NDAA), according to The Financial Times.
The NDAA is an important annual bill that broadly provides funding for the US Department of Defense. It is considered a must-pass legislation, meaning Congress is expected to approve it.
Including the proposed AI chip restrictions in the NDAA could make it easier for lawmakers to pass them. This is because the defence spending bill is considered essential, making it highly unlikely that the US president would use his veto power to reject the entire legislation.
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Emily Kilcrease, a former US trade official who now works at the Center for a New American Security think-tank, said political developments had significantly changed the situation. Kilcrease said the Nvidia scandal, the results of the November midterm elections and the upcoming NDAA had together increased the chances of passing the proposed restrictions, according to The Financial Times.
The November midterm elections have also changed the political situation in Washington. Democrats are set to take control of both chambers of Congress when the newly elected lawmakers take their seats in January. However, the current Congress, which has a Republican majority, will consider the NDAA before the newly elected lawmakers take office in January.
This gives the current Congress a limited period to finalise the defence spending legislation and include the proposed restrictions on AI chip exports. Despite the growing support, there are concerns that lawmakers may not have enough time to pass all the proposed measures before the end of the year. A Republican Senate aide cautioned that Congress had a long list of pending work and very little time to complete it.
Howard Lutnick faces questions over Nvidia chip sales to Megaspeed
The renewed push for restrictions has also increased pressure on US Commerce Secretary Howard Lutnick. Lawmakers are demanding that he explain how his department allowed Nvidia to sell chips to Megaspeed.
The Financial Times reported that Lutnick's Commerce Department delayed efforts to add Megaspeed to the US government's entity list. This list includes companies that Washington considers a national security risk. Under US rules, American companies must obtain special licences from the Commerce Department before exporting goods to companies placed on the entity list.
Adding Megaspeed to this list could therefore make it more difficult for US companies such as Nvidia to sell sensitive technology to the Singapore-based company. The controversy has also drawn attention to disagreements within the US government over how to deal with Megaspeed.
US Treasury Secretary Scott Bessent said on Friday that his department had supported adding Megaspeed to the entity list for several months. Bessent's statement suggests that the Treasury Department had favoured action against Megaspeed even before the latest controversy involving Nvidia and Jensen Huang came to light.
The debate now centres on whether the US should introduce stricter controls to prevent advanced AI chips from reaching China, including through companies operating outside the country and overseas cloud services.
