WASHINGTON -- Lawmakers are demanding tighter restrictions on chip exports following Jensen Huang's affair with a business partner suspected of being a Chinese intelligence source, a push that threatens to cost Nvidia and other semiconductor companies billions of dollars in revenue.
Top Republicans and Democrats said this week that they hope to include three proposed measures making it more difficult to send artificial-intelligence chips around the world in a stalled defense package.
The measures under consideration include provisions restricting exports of AI chips to adversarial nations including China, tightening controls on allied countries including the Netherlands and Japan so they can't send chip manufacturing equipment to China and efforts to track chips before they are exported to establish their locations. While many lawmakers have invoked Nvidia in proposing the bills, the proposals could hurt other chip companies including Nvidia competitor Advanced Micro Devices and even tech giants like Microsoft and OpenAI that are attempting to build data centers overseas. Industry executives say the measures would have a chilling effect on any export deals, particularly if rules mandating chip tracking become law. That would undermine U.S. companies and cede more of the global market to Chinese competitors, trade groups say.
Even if the bills don't pass in the lame-duck session, Democrats who are candidates to take over key committees in January said there should be a full congressional investigation into Nvidia CEO Jensen Huang's relationship with Alice Huang, who was a top executive at a data-center company being probed for diverting Nvidia chips to China. The legislative implications show how the Nvidia CEO's affair could have business consequences for the world's top chip designer and the entire industry. Huang has helped shape policies for the whole AI industry by developing a close relationship with President Trump and top model developers including OpenAI.
Proponents of export restrictions who have warned of national-security conflicts like those potentially affecting Nvidia are using the episode as evidence that Washington needs to crack down on export loopholes.
"Hopefully this is the final nail in the coffin of those who are advocating for this disastrous policy," said Alex Bores, a Democratic member of the New York Assembly who recently co-founded an advocacy group pushing for stronger AI regulation and export restrictions.
Export controls have been in focus since 2022, when the Biden administration began restricting certain shipments to prevent adversarial nations from accessing the technology underpinning the AI boom. The administration pursued a global plan capping the number of chips various countries could buy that the Trump administration later unwound.
The Commerce Department has been investigating whether Alice Huang's Singapore-based company Megaspeed diverted Nvidia chips to China in violation of export restrictions since 2024, a probe that is now being led by the Justice Department. Megaspeed has said it is a legitimate and compliant company that follows the law.
Many other companies in Southeast Asia have been suspected of similar activities, fueling a range of bills to tighten control of chips fueling the global AI boom. The White House's alliance with Nvidia and other tech companies contributed to past efforts stalling, but lawmakers and analysts said the new focus on the subject and Democrats winning control of both chambers of Congress last week -- in part by opposing the AI industry and data centers -- has given them new momentum.
"We're going to work hard to make sure that those provisions make it into the final version" of the defense-spending package, said Hakeem Jeffries (D., N.Y.), the top Democrat in the House who is in line to become speaker in the next Congress. The Nvidia security concerns came up Monday during an intelligence briefing for top lawmakers about Iran by Director of National Intelligence Jay Clayton and Central Intelligence Agency Director John Ratcliffe.
Republicans who have broken with Trump and driven efforts to curtail chip exports include Sens. Jim Banks (Ind.) and Pete Ricketts (Neb.), and Reps. Brian Mast (Fla.) and John Moolenaar (Mich.), who lead the House Foreign Affairs and China Select Committees. Mast and Moolenaar are among those who recently asked Huang to brief lawmakers on the Nvidia security matter next week.
Trump said Monday Huang told him "he had absolutely no idea that the person in question was a spy." An Nvidia spokesman said the company cut off new shipments to Megaspeed in June 2025 and that ban is still in place, adding that the Commerce Department still has yet to blacklist the company or take other action requiring the company to stop doing business with it.
One challenge for the export provisions is they are currently attached to the National Defense Authorization Act, legislation approving military spending that is widely seen as a must-pass bill. The package is stalled in Congress, and provisions are often swapped in and out as part of negotiations to build consensus. Chris McGuire, a senior fellow at the Council on Foreign Relations who previously worked on tech and security issues at the State Department, said lawmakers should show they are serious about export restrictions by voting on the three bills on their own. "They should just be pushed now and voted on, up or down, as a way to signal Congress's concern about this issue and how it's being handled," he said.