Nvidia CEO Jensen Huangs spy affair could spark Congress crackdown on AI export controls: Massive earthquake | Latest Tech News
Nvidia CEO Jensen Huang’s affair with an alleged Chinese spy has sparked fears of a major clampdown on the AI industry – pitting China hawks against those who warn that an overreaction will put the US at a drawback versus Beijing, The Post has realized.
Lawmakers from both events are scrutinizing past remarks from Jensen, who was the most influential voice pushing US officers to curb export controls on Nvidia chips — even as they assess whether or not his affair with Megaspeed govt Alice Huang compromised national security.
Some DC sources imagine the scandal will consequence in a bipartisan push for even stronger curbs on chip gross sales — with proponents involved that Nvidia’s cutting-edge chips will fuel larger inroads into AI by Chinese corporations.
Alice Huang attends a dinner with Nvidia CEO Jensen Huang at a restaurant in Taipei, Taiwan, May 22, 2025. VIA REUTERS
Jensen Huang, chief govt officer of Nvidia Corp., during a news convention on the sidelines of the APEC CEO Summit in Gyeongju, South Korea, on, Oct. 31, 2025. Bloomberg via Getty Images
At the same time, some of them warn that ordering such a crackdown – for instance banning a loophole permitting Chinese corporations to rent access to Nvidia’s high-end {hardware} through data facilities situated in Southeast Asia – would play proper into China’s arms, a source close to the scenario said.
“If they do that, it will just drive those foreign clouds to Huawei,” the source told The Post, referring to the Chinese telecom giant that is aggressively pursuing AI business.
“Ultimately, over time, those clouds will choose what’s available to them. It becomes an economic question – do you want foreign clouds to have American technology or Huawei technology?”
Ousting Huang himself, the source added, can be a “massive earthquake” during a fragile second for the AI sector, which is already dealing with questions on Wall Street over whether or not it’s a giant bubble prepared to burst.
In a video body grab, Alice Huang attends a dinner with Nvidia CEO Jensen Huang at a restaurant in Taipei, Taiwan, May 22, 2025. via REUTERS
“Nvidia is at the center of the AI buildout and he’s the central figure in the company,” the source said of Jensen Huang.
That argument appears unlikely to fulfill key lawmakers who have been already involved about China gaining access to Nvidia’s best {hardware} – even before Huang’s embarrassing misstep.
House Minority Leader Hakeem Jeffries (D-NY) said he “strongly supports” including harder chip controls to an annual year-end protection spending invoice, while Sen. Jim Banks (R-Ind.) and Sen. Elizabeth Warren (D-Mass.) called for laws focusing on “various pathways through which China accesses advanced chips.”
Here’s the latest on the Nvidia CEO’s affair with an alleged Chinese spy:
“Republican chairs are reaching out to speak to Jensen and get some more details,” a Senate Democratic aide told The Post. “This is not, at this point, a partisan mud fight. This is bipartisan. We need answers about what happened here, what the FBI is looking into or already knew. We are in a bipartisan gathering phase.”
One key loophole at present under the microscope is China’s well-documented observe of accessing high-end Nvidia {hardware} housed in data facilities based in Southeast Asia. US officers have suspected Singapore-based Megaspeed – and alleged Chinese intelligence asset Alice Huang – of exploiting the loophole to smuggle AI chips to China.
Nvidia has long resisted efforts to crack down on so-called “remote access,” while key Commerce Department figures like Howard Lutnick and undersecretary Jeffrey Kessler, who oversees the Bureau of Industry and Security, have been reluctant to take motion.
Rush Doshi, a China coverage skilled and Senior Fellow at the Council on Foreign Relations, expects Democrats to push exhausting to close the “remote access” loophole.
“If the reporting is right, it potentially reveals corruption and compromise in American China policy on one of the most important issues of our time, including in ways that undermine AI safety for Americans,” Doshi said.
“Democrats and Republicans alike are going to want to investigate what they see as the decision to sell off American national security and economic advantage and AI safety for profit.”
The Nvidia brand is displayed outdoors the company’s headquarters in Taipei, Taiwan, Monday, Nov. 9, 2026. RITCHIE B TONGO/EPA/Shutterstock
In October, White House officers nudged Congressional staffers to tack on a provision that would direct the Commerce Department to close the loophole as half of the AI Overwatch Act, a measure cosponsored by Warren and Banks and set to be included in the year-end protection invoice, The Information reported.
Nvidia declined to remark. Representatives for the White House and Commerce Department didn’t immediately return questions for remark.
Aside from pursuing solutions about Huang’s personal conduct, lawmakers from both events are sure to search solutions about the Trump administration’s handling of the scenario – particularly, its delay in taking motion despite warnings months in the past that the Nvidia boss was tangled up with an alleged Chinese spy, and the Commerce Department’s dealings with Nvidia, Doshi added.
Last yr, US officers grew involved that Megaspeed, the biggest purchaser of Nvidia chips in southeast Asia, was concerned in chip smuggling and requested Nvidia to audit its dealings with the firm. Nvidia initially replied that all of its chip gross sales have been precisely recorded – even though Megaspeed had imported 50,000 more laptop chips than what Nvidia linked to its data facilities, Bloomberg reported.
Commerce Secretary Howard Lutnick testifies during a subcommittee listening to with the Senate Committee on Appropriations in the Dirksen Senate Office Building on April 22, 2026 in Washington, DC. Getty Images
Meanwhile, Bloomberg reported Nvidia normal counsel Tim Teter immediately called Kessler, who oversees chip export controls, in the summer season of 2025 to ask about the division’s investigation into Megaspeed.
The report added that Commerce staffers have been subsequently “muzzled in their ability to look into the company” and told to route requests on the matter through Kessler.
“BIS conducts all enforcement strictly by the book,” a spokesperson told the outlet. “BIS enforces aggressively across the board, including with respect to chip smuggling, and enforcement is at an all-time high.”
While the scandal is a major black eye for Nvidia, it’s unlikely to utterly upend the company’s function as the linchpin of the AI motion, according to Daniel Newman, CEO of Futurum Group. The company’s deal roadmap is already largely set through 2028, and corporations can’t simply discover a alternative for Nvidia’s superior {hardware} even if they have been inclined to.
However, there are real considerations about Huang’s means to stay at the helm of Nvidia – despite the fact that many think about him irreplaceable to the company and the dearth of any apparent successor within its ranks.
“The big question is on the continuum of, is he a CEO that committed infidelity? I think he can survive that. That doesn’t mean it’s good,” Newman said. “All the risks around intelligence stuff is not survivable. If any line was crossed beyond him just having an affair, the board is going to have to move.”
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