Congress closes in on tighter AI chip export curbs after Nvidia scandal

Congress is moving toward tighter restrictions on advanced AI chip exports to China, as Republican and Democratic leaders coalesce behind new limits in the wake of the scandal that ended Jensen Huang's tenure as Nvidia's chief executive.

Three export-control measures were included in the Senate's version of the annual defense policy bill, the National Defense Authorization Act. Senate Majority Leader John Thune, R-S.D., told Semafor there is a "high probability" Congress imposes more restrictions on chip exports to China, though he and Senate Armed Services Chair Roger Wicker, R-Miss., acknowledged there is no agreement yet to keep the provisions in the final version now being negotiated between the chambers.

"I give it a better than even chance," Sen. John Kennedy, R-La., told Semafor. "I understand people have affairs but if you're going to do it, try not to have an affair with a Chinese spy."

In the House, Speaker Mike Johnson and Minority Leader Hakeem Jeffries both favor strengthening export controls, according to Semafor. The push follows disclosures that Huang, Nvidia's co-founder, had an affair with Alice Huang, an executive at Singaporean technology company Megaspeed, which the U.S. government believes spied for China. Nvidia sold about $4 billion in chips to Megaspeed, which is suspected of diverting the technology to China and is under investigation by the Justice Department.

Resignation did not quiet lawmakers

Huang resigned on Nov. 12, days after admitting the affair. Nvidia named Chief Financial Officer Colette Kress interim CEO and appointed Harvey C. Jones as the board's first chair. In staff emails obtained by CNBC, Kress said she "believed deeply" in the company and thanked employees for their "resilience, professionalism and continued dedication," while Jones wrote that "the Board has full confidence in Colette to deliver on our commitments to shareholders, customers, partners, and to each of you."

The exit did little to quell bipartisan demands for an accounting of the national security fallout. Thune told reporters he supports a Senate investigation into Huang's potential influence on U.S. artificial intelligence and chip policy. Senate Minority Leader Chuck Schumer wrote on X that "Congress must demand answers," asking what the administration knew about Huang's relationship with a suspected Chinese intelligence asset. Jeffries called for a classified briefing for members.

"The bottom line is we need to understand the magnitude of this with respect to Chinese intelligence, possible chip diversion," said Rep. John Moolenaar, R-Mich., chair of the House Select Committee on China.

Investigations are expected to begin before control of Congress changes hands in January.