China’s access to Nvidia chips in doubt as curbs gain traction in US Congress amid spy scandal

US HOUSE Speaker Mike Johnson said on Thursday (Nov 12) there was growing consensus in Congress on limiting chip exports to China after a spy scandal forced out Nvidia CEO Jensen Huang.

Huang stepped down after reports of a romantic relationship with a businesswoman whom US authorities suspect of spying for the Chinese government.

Lawmakers from both parties have since called for tougher restrictions on China’s access to advanced AI chips, threatening access to chips that underpin China’s surging AI development. And senior White House officials were discussing whether Commerce ​Secretary Howard Lutnick should be pushed out, two people familiar with the situation said, as the desire to take action rose across Washington.

A growing number of lawmakers have criticised Lutnick for the administration’s refusal to add dozens of Chinese companies to a key US trade blacklist, and over whether the government was properly overseeing Nvidia’s exports to China.

Nvidia’s advanced AI chips are widely used to develop cutting-edge AI models, making the company key to the US race against China to build superior AI systems. The US has sought for years to limit China’s access to Nvidia’s chips because it does not want the Chinese military to benefit from them.

“The export controls on chips to China has been a big issue around here,” Johnson, a Louisiana Republican, told reporters at the US Capitol, adding he favoured limiting China’s access to the advanced technology. “I think there’s a developing consensus in Congress that is an important position to take.”

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The Chinese businesswoman, Alice Huang, was an executive at Megaspeed, an Nvidia partner the US government suspects of helping China obtain advanced AI chips restricted under US export controls. Beijing has denied Alice Huang is a spy.

Republicans eye export restrictions

The case has revived claims among China critics in Washington that US export policies are too weak, boosting calls for more restrictions.

Reuters reported that Chinese AI companies are trying to rent ​Nvidia-powered computing capacity outside China because they are worried the Jensen Huang allegations could spur Washington to tighten restrictions on their ability to access the company’s chips remotely.

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Congressional Republicans are keen to attach new restrictions on exporting advanced AI chips to China in the annual defence authorisation Bill, a must-pass measure that funds the military and typically ​attracts bipartisan support, according to a Senate aide, who spoke on the condition of anonymity.

Lawmakers are pressing their colleagues to pass at least four Bills on chip exports, according to statements since Monday. The AI Overwatch Act would give Congress more power over advanced AI chip exports. The Chip Security Act would require ​companies to track the location of advanced AI processors to prevent smuggling.

The Match Act would pressure US allies to restrict sales and maintenance of advanced chipmaking equipment destined for China. The Remote Access Security Act would give the Commerce Department the tools to stop Chinese firms from renting overseas data centres to access Nvidia chips.

Scrutiny of Huang likely to continue

Huang’s resignation is unlikely to end congressional scrutiny of Nvidia and could leave the former chief executive more exposed to investigation, said Sunny Cheung, an analyst at the Washington-based Jamestown Foundation.

“Congress can still subpoena him and Nvidia should conduct an independent investigation to determine whether the problems extend beyond Huang,” Cheung said.

Cheung said Huang’s departure could weaken Nvidia’s influence in Washington and create additional momentum for legislation that tightens restrictions on advanced chip exports. He said Nvidia’s new leadership could also reconsider the company’s China strategy as it seeks to rebuild trust with US policymakers.

Jensen Huang is separately expected to testify before Congress before Thanksgiving, which falls on Nov 26. House Foreign Affairs chairman Brian Mast, a Florida Republican, told reporters on Thursday that congressional staff spoke with Nvidia on Wednesday night about a date and location for his testimony.

Mast and two other leading House Republicans asked Huang last week to brief them behind closed doors about his relationship with Alice Huang. REUTERS