By Courtney Rozen
WASHINGTON, Nov 12 (Reuters) – U.S. lawmakers from both parties are pushing for tougher restrictions on China’s access to advanced artificial intelligence chips, following media reports of former Nvidia CEO Jensen Huang’s affair with a suspected Chinese spy, increasing scrutiny of the company’s role in U.S. national security.
Huang resigned Thursday, days after reports of an affair with a Singapore-based technology company executive whom U.S. authorities suspect of spying for Beijing. Nvidia did not address Huang’s actions in its statement; he admitted to an extramarital affair without naming the person.
Nvidia’s advanced AI chips are widely used to develop cutting-edge AI models, making the company a key player in the United States’ race against China to build superior AI systems. The United States has for years sought to limit China’s access to Nvidia’s most advanced chips, although Chinese companies have repeatedly found ways to circumvent such restrictions. Huang supported allowing more exports to China.
House Speaker Mike Johnson said Thursday that the growing consensus in Congress favors new restrictions on chip exports to China.
Here are the proposals Congress is weighing. A handful of lawmakers want to attach them to the annual defense authorization bill, a must-pass measure that funds the military and typically attracts bipartisan support. A Senate version of the legislation already includes several, including the AI Overwatch Act, the Chip Security Act and the Match Act.
GROWING CONGRESS AUTHORITY ON CHIP EXPORTS
U.S. law gives the Commerce Department broad authority to block or allow exports of advanced chips without Congressional intervention.
Sen. Elizabeth Warren, Democrat of Massachusetts, and Sen. Jim Banks, Republican of Indiana, argue that export control decisions with major national security implications should receive greater congressional oversight.
Their proposed AI Overwatch Act would give Congress a greater role in reviewing changes to export rules. The move is important for Nvidia because it could make it more difficult for future administrations to ease restrictions on sales of its advanced chips to China.
Nvidia’s revenue from chip sales to Chinese data centers is currently close to zero, according to a company statement in August, and the company doesn’t expect that to change in the third quarter.
ADVANCED CHIP TRACKING
The Chip Security Act seeks to address a recurring problem of advanced chips sold legally overseas but then diverted to China.
The bill would require chipmakers to track the location of advanced AI processors and notify the government if they suspect the chips have reached prohibited users.
For Nvidia, the measure could create new compliance costs and new reporting obligations. The Semiconductor Industry Association, of which Nvidia is a member, has said mandatory tracking requirements could be costly for the industry.
PRESSURE ON US ALLIES
The Match Act would pressure U.S. allies to restrict sales and maintenance of advanced chipmaking equipment destined for China.
Allies such as the Netherlands and Japan are home to ASML and Tokyo Electron, which make tools used to make semiconductors.
The bill would not directly restrict Nvidia’s chip sales. Supporters argue that this could make it harder for China to develop its own advanced AI chips to compete with Nvidia in the long term.
REMOTE ACCESS ESCAPE
The Remote Access Security Law targets a workaround increasingly used by Chinese AI companies.
Instead of purchasing advanced chips directly, some Chinese companies rent computing power in foreign data centers equipped with Nvidia chips and access the systems remotely.
The bill would give the Commerce Department the authority to regulate this activity. The bill passed the House in January and awaits consideration by the Senate.
Of the proposals under consideration, this one could have the most direct effect on Nvidia. The company said in July that the measure, if adopted, could have “a material impact on our business.”
Reuters reported on Thursday that Chinese AI companies were racing to secure access to computing capabilities powered by Nvidia outside China, fearing that the controversy around Huang could accelerate Washington’s efforts to tighten restrictions.
(Reporting by Courtney Rozen; editing by David Gaffen)
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