Nvidia’s Spy Scandal Hands Hill Hawks Fresh Ammo On China Chips

Congress is back, and Nvidia’s on the menu.

News that the chipmaker’s board will investigate CEO Jensen Huang after he was reportedly the target of Chinese espionage is set to energize Capitol Hill efforts to restrict its exports to China and accelerate congressional scrutiny of the AI giant.

“The U.S. should immediately pause the shipment of advanced AI chips to China until we can get to the bottom of this incident and ensure our national security is not being undermined,” Rep. Michael McCaul (R-Texas), the former chair of the House Foreign Affairs Committee, said on X.

The fallout is also being felt in the Trump administration, where disagreement over the chip exports question has been simmering. The revelations are set to test Trump’s tight relationship with Huang.

Before Sunday’s announcement, Nvidia was already set to face off with Congress during the lame-duck session, thanks to a bipartisan effort to attach chip export controls to the annual, must-pass defense package. Now, according to two aides with knowledge of the talks and granted anonymity to discuss them, Democrats in favor of the policy plan to push for even tougher limits.

One of the aides said the midterm election results were a clear signal that voters want Congress to act as a check on this administration.

“Republicans who’ve been nervous about crossing the White House on this know the next version gets written by Democrats if they don’t deal now,” the person said.

Sen. Elizabeth Warren (D-Mass.), who is poised to lead on the issue in the next Congress as chair of the Senate Banking panel, is among the most vocal backers of the effort and said Sunday on CBS that there is “substantial bipartisan support” on the committee.

Nvidia has been lobbying the Trump administration to pare back the export controls. The company has been asking the administration to pressure lawmakers to hold off on enacting strict export restrictions in the annual defense bill.

As one Republican Hill aide put it to POLITICO, echoing GOP frustration with the cozy dynamic between Trump and Huang: “Nvidia has gotten very used to getting their way through the White House.”

Trump on Sunday defended the Nvidia CEO, telling reporters that he hadn’t spoken to Huang about the situation but considers him a “fine person.”

Behind the scenes, there is a rift among Trump administration officials over whether allowing Nvidia to sell freely to the Chinese market supports U.S. dominance in artificial intelligence or poses a risk. An administration official and another person close to the discussions said the scandal is poised to deepen the disagreement.

The president cares about “issues like the trade deficit but does not treat the high-end tech race the same way or see the relationship through a national security lens," said the administration official, who added that Huang’s affair at the heart of the alleged espionage, “no matter how salacious,” won’t change that.

The White House did not respond to a request for comment.