Jensen Huang scandal shakes up Washington, D.C., with calls for resignation from Congress

Members of Congress are calling Nvidia Chief Executive Officer Jensen Huang has resigned, and the company is on the verge of summoning executives from the leader in advanced artificial intelligence chips.

Senate Banking Committee member Kevin Cramer, D-Del., on Wednesday doubled down on his calls for Hwang to resign, followed by similar claims from House Republicans and ranking Democratic members of the House Oversight Committee.

“I should resign as a matter of conscience,” Cramer told CNBC after revelations that Huang had ties to suspected Chinese spies because the semiconductor company he co-founded had received permission from the U.S. government to sell technology to China.

Huang, whose company is a major beneficiary of the artificial intelligence boom, acknowledged on Sunday that he had had an affair with a woman who media outlets reported had identified as a Chinese spy by U.S. intelligence agencies. The revelations have sent shock waves across Washington, with lawmakers now worried that America’s AI supremacy could be at risk.

“At the end of the day, what I’m concerned about is whether she can use what she knows about him,” said Kramer, referring to Alice and Jensen Huang, who are not related. “This person is now very vulnerable to blackmail and extortion. As a matter of national security, I don’t think we can take that risk.”

Mr. Cramer’s comments were in reference to the Nov. 18 deadline set by the three House members who requested Mr. Hwang to testify before the committee.

Republican Rep. Brian Mast, chairman of the House Foreign Affairs Committee, John Moolener, chairman of the Permanent Select Committee on China, and Rick Crawford, who heads the House Intelligence Committee, requested Mr. Hwang’s appearance in a Nov. 4 letter. Majority party members also have subpoena power if they choose to use it.

Mr. Mast and Mr. Moulenard told reporters Wednesday afternoon that they had not yet heard from Mr. Hwang and planned to respond by the end of the day.

Asked if the committee was considering subpoenaing Hwang if he does not agree to appear in court, Mast said, “Yes.”

“All three committees have subpoena power, and I know that all three committees have a very serious interest in getting to the bottom of this matter and ensuring transparency,” Moolener said when asked the same question.

“We’re going to continue to pursue this,” Moolenaar said.

Lawmakers are not alone in their criticism, concern and outright shock over the incident. And with Democrats poised to take control of both houses of Congress in January, scrutiny is expected to intensify. Huang was close to President Donald Trump during his second term, and flew to China on Air Force One in May.

“Jensen Huang should resign from Nvidia,” Rep. Suhas Subramanyam, a Virginia Democrat who serves on the House Oversight Committee, told CNBC. Subrahmanyam is the top Democrat on the committee’s military and foreign affairs subcommittee.

“I disagreed with his opinion that there is no downside to exporting chips to China,” he said. “But it never occurred to me that he might have had connections with Chinese spies who were helping to smuggle chips into China at an alarming rate.”

Rep. Don Bacon (R-Nebraska), who sometimes opposes Trump and is retiring from Congress, also said the CEO should resign.

“As far as I know, yes,” Bacon told CNBC about whether Phan should resign. “That means he allowed himself to be compromised by the Chinese government. That’s not good.”

Mr. Hwang was particularly opposed to strict export controls on AI chips to China, and he clashed violently with China hawks on Capitol Hill.

Democrats are widely expected to launch a myriad of investigations into the White House and industry once they take control of the House and Senate in January. Nvidia may now be at the center of these investigations.

“There are two parts to this investigation and they need to be carried out somewhere immediately,” Subrahmanyam said. “One, what was going on between Nvidia and China, and two, why the administration didn’t do anything about it even though they seemed to know, what the administration knew, and how the money from Nvidia and Jensen Huang affected this administration.”

Rep. Jay Obanolte (R-Calif.), co-chair of the House AI task force, said Tuesday he hopes the Huang scandal can be avoided detracting from talks about imposing export controls on advanced AI chips.

The situation could give Congress further ammunition as it seeks to pass a series of National Defense Authorization Acts this year to tighten export controls for advanced AI chips.

Congress still has not passed an annual defense bill, a top priority for lame-duck lawmakers.

These bills include the AI ​​Surveillance Act, the MATCH Act, and the Chip Security Act, all of which aim to prevent U.S. chip technology from falling into enemy hands.

Sens. Elizabeth Warren (D-Mass.) and Jim Banks (R-Ind.) urged their colleagues to include AI surveillance legislation in statements after Huang’s affair was revealed. Warren, the incoming Senate Banking Committee Chair, introduced the bill in the Senate along with banks.

“Mr. Huang’s admission of ties to suspected Chinese intelligence agents adds urgency to these national security concerns and raises important questions for NVIDIA to answer about the extent to which these activities are connected,” the senators said. “Now is the time for Congress to take decisive action to pass important legislation like the NDAA’s AI Surveillance Act, which cuts off China’s access to advanced chips.”

And Subrahmanyam warned that what Nvidia does now, and whether Huang remains at the top of the company, could affect its relationship with Washington and its crackdown on lawmakers.

“Once we know that NVIDIA knew what was going on and did nothing, they are making a choice, and we as regulators and as watchdogs need to protect the American people,” he said.