Congress Moves to Tighten AI Chip Export Rules After Nvidia Spy Scandal

Lawmakers in both parties are pressing to tighten U.S. restrictions on exports of advanced artificial-intelligence chips to China, after the resignation of Nvidia chief executive Jensen Huang amid a spy scandal and days before President Donald Trump's planned meeting with Chinese leader Xi Jinping.

Huang resigned from the company he co-founded after reports of two extramarital affairs — one with a Chinese businesswoman identified as Alice Huang, who is not related to him and was reportedly recruited by Chinese intelligence, and one with an Nvidia executive who reported to him. The board accepted his resignation following a late-Wednesday meeting.

Fresh momentum for stalled bills

According to CNBC, the scandal has given policymakers new ammunition to push for a package of chip-control measures that had been stalled by corporate and White House pushback. The bills — the AI Overwatch Act, the Chip Security Act and the MATCH Act — are aimed at limiting the flow of advanced chips to U.S. adversaries, particularly China, and lawmakers want them folded into this year's National Defense Authorization Act.

Senate Democratic leader Chuck Schumer on Tuesday called on Congress to pass the measures and urged a full accounting of Trump's defense of Huang. House Select Committee on China Chairman John Moolenaar, R-Mich., also called for including chip export controls in the defense policy bill. Huang had been among the loudest industry voices opposing strict U.S. export controls on advanced chips to China.

Huang was "the industry's most effective lobbyist against tighter rules," David Meale, who heads Eurasia Group's China practice, told CNBC. The scandal, he said, had weakened Nvidia's "singular ability to slow the progress of those bills" and made it "politically harder for negotiators to strip chip provisions out of this year's NDAA."

Scrutiny widens

The fallout has also put offshore data-center hubs that supply restricted chips to Chinese customers under fresh scrutiny, CNBC reported. Analysts said the developments are unlikely to derail the Trump-Xi summit, though tougher U.S. chip curbs could still stir irritation in Beijing.

Separately, Sen. Chris Coons, D-Del., had earlier called for a probe, saying, "I'm pushing to investigate Jensen Huang and Nvidia to determine whether our national security was compromised." Reporting on Alice Huang described her as a Megaspeed executive and alleged smuggler of restricted technology.