Congress moves to pass tighter AI chip export rules following Nvidia scandal

Jensen Huang's alleged affair with Chinese spy 'increases momentum' to crack down on US hardware reaching China

US lawmakers are accelerating efforts to crack down on advanced AI chips reaching China in the wake of revelations that Nvidia founder Jensen Huang had an affair with a woman suspected of being a Chinese spy.

Democrats and Republicans have both thrown support behind a raft of bills curbing sales of sensitive chips overseas and giving Congress the ability to review and potentially block sales already approved by the Trump administration.

"There's absolutely increased momentum for this legislation in light of the recent scandal," said Owen Tedford, a senior research analyst at Beacon Research, a Washington consultancy that monitors congressional action.

Huang, who had battled to ease export rules, resigned earlier this week following revelations that he had extramarital affairs, including with a woman who was an executive at Singapore-based Nvidia customer Megaspeed.

The US has been investigating for more than a year whether Megaspeed was smuggling chips to China, while the woman, Alice Huang, is suspected of working for Chinese intelligence.

"Nvidia may feel like they're done or trying to move on, but Washington is not ready to move on," Tedford said.

Nvidia chips are used to train the most advanced AI models from labs such as OpenAI and Anthropic, and restricting their export is seen by proponents as essential to keeping America's technical edge.

While the proposals have already been making headway on Capitol Hill, the political furore over the Trump administration's failure to stop Nvidia's chips being exported to Megaspeed has supercharged efforts.

One bill, the Remote Access Security Act, would stop Chinese companies from remotely accessing chips overseas through cloud services, even when they are barred from buying the physical chips.

Three senior Republican lawmakers on Friday urged their colleagues to immediately pass several of the bills clamping down on AI chip exports.

Republicans John Moolenaar, Brian Mast and Rick Crawford, who chair committees on China, foreign affairs and intelligence in the House of Representatives, wrote to Huang, Nvidia General Counsel Tim Teter and the commerce official overseeing export controls, Jeffrey Kessler, requesting their appearance in front of Congress.

"We need to know the full extent to which our national security has been put at risk," they wrote, adding that "this situation is a prime example of why Congress must immediately pass" four bills aimed at boosting oversight.

Many of the proposals have also this week attracted the support of the outgoing Speaker of the House, Republican Mike Johnson, and his likely successor, Hakeem Jeffries. The measures are likely to be attached to the final version of the annual US defence spending legislation, as legislators work to hammer out the final text.

The National Defense Authorization Act (NDAA) broadly funds the US Department of Defense and is considered a "must-pass" bill, meaning the president is highly unlikely to use his veto power to reject the measures sent to his desk.

The NDAA will be considered by the current Republican-majority Congress before the lawmakers elected in November's midterm elections take their seats in January.

"The momentum has just totally swung," said Emily Kilcrease, a former US trade official now at the Center for a New American Security think-tank.

"It's because of the Nvidia scandal. It's because of the midterm results. You know, it's because we actually do have a vehicle with the NDAA coming up as a must-pass in the lame duck."

Still, one Senate GOP aide cautioned that legislators might run out of time this year. "The list of things to accomplish is long, and time is short," they said.

The renewed energy behind efforts to rein in the sale of chips to China comes as furious lawmakers demand Commerce Secretary Howard Lutnick explain how he allowed Nvidia to sell chips to Megaspeed.

The FT has reported Lutnick's commerce department delayed efforts to add Megaspeed to Washington's blacklist of companies the US considers a risk to national security. American companies require licences from the commerce department to export goods to companies on the so-called entity list.

Treasury secretary Scott Bessent on Friday said his department had been "in favour of putting Megaspeed on the entity list for months".