Republican and Democratic leaders are uniting behind a new crackdown on advanced chip exports to China in the wake of the Nvidia scandal, which could become law by the end of the year.
In the House, Speaker Mike Johnson and Minority Leader Hakeem Jeffries favor strengthening chip export controls following revelations that current Nvidia CEO Jensen Huang had an affair with an alleged Chinese spy. That raises national security concerns about the mammoth chipmaker, which sold $4 billion worth of chips to Singaporean company Megaspeed, which is suspected of diverting the technology to China and is under investigation by the Justice Department.
Senate Majority Leader John Thune told Semafor that there is a “high probability” that Congress will impose more restrictions on chip exports to China. Three measures were included in the Senate’s version of the must-pass defense policy legislation, known as the NDAA, but Thune and Senate Armed Services Chairman Roger Wicker, R-Miss., acknowledged there was no agreement yet to include them in the final version of the bill currently under negotiation between the two chambers.
“I give it a greater chance than even a chance,” Sen. John Kennedy, R-La., told Semafor about the possibility of strengthening export controls, which are managed by the Commerce Department. “I understand that people have affairs, but if you decide to do it, try not to have an affair with a Chinese spy.”
What’s on the table
There are three main bills that could be included in the NDAA and Senate Democratic Leader Chuck Schumer wants Congress to pass all three “to cut off China’s access to advanced U.S. technology before it is too late.”
The Chip Security Act aims to prevent the smuggling of advanced AI chips to foreign adversaries, in part by verifying their location once they have been shipped. The MATCH Act closes loopholes regarding chipmaking equipment and export rules in allied countries. And the AI Overwatch Act would make chip sales treated more like foreign arms sales and give Congress oversight over how Commerce approves or disapproves a license to sell chips to a “country of concern,” including China.
Johnson told reporters Thursday that there was “a developing consensus in Congress” around more restrictions on chips, calling it “an important position to take, particularly in light of recent developments.” And Democrats like Jeffries have signaled support for including AI-related provisions in the NDAA, as have some Republicans.
“I think the NDAA gives us an opportunity to put guardrails around AI” or export restrictions, said Rep. Mike Levin, Democrat of California, who said he would otherwise defer to Rep. Adam Smith, Democrat of Washington, the new House Armed Services chairman.
Sen. Mike Rounds, R-S.D., argued that the Nvidia debacle “reinforces” the need for Congress to include more export controls in the defense bill, adding that there is “strong demand” for it, even if there is no final agreement on what that will entail.
“Which plan is prioritized in the final product, I don’t know yet. I think there are still several different strategies to look at,” Rounds said.
Why this year is different
During last year’s NDAA fight, Sens. Elizabeth Warren, D-Mass., and Jim Banks, R-Ind.’s GAIN AI Act, an earlier version of the AI Overwatch Act, was folded into the Senate version of the NDAA, but was removed from the House version after pressure from Nvidia, the semiconductor industry as a whole, and the White House (including then-advisor David Sacks). AI). Congress did provide some investment controls, but senators from both parties wanted to do more.
This year, the bills are much further along in the process, unexpectedly buoyed by the Nvidia scandal and gaining momentum among Republican Party leaders, a Senate Democratic aide told Semafor. Anthropic has publicly supported all three bills, and OpenAI has also prepared for them after initially being reluctant to support the proposals.
Nvidia isn’t alone in opposing the bills: the tech industry as a whole has also lobbied against them, with the Information Technology Industry Council arguing that they would “damage America’s technology stack.” But Congress will feel more emboldened than ever to act, given the security risks exposed by the controversy.
Yet the defense bill, one of the few pieces of legislation passed each year, could be jeopardized by Democrats’ efforts to add provisions aimed at ending the war in Iran. Many in the party are pushing to use mandatory legislation or the December government funding deadline as leverage against President Donald Trump, which could poison Republican support for those bills.
“We have leverage. Take when the appropriations bills run out. I want the war in Iran to stop. I think we should put provisions in this bill, in the NDAA for that matter, to stop it,” said Smith, the new chairman of the House Armed Services Committee.
Democrats face tough decisions about how difficult it will be to push for these provisions now and risk a government shutdown or failure of the defense bill, especially when they could craft the legislation on their own terms next year when they take control of the House and Senate.
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