The close relationship between Nvidia CEO Jensen Huang and a woman accused of spying for China has highlighted divisions in Washington over exports of advanced chips to China.
Huang, the head of one of the most important companies in the global artificial intelligence race, is one of Silicon Valley’s most influential voices against restricting sales of high-end chips.
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The tech executive has spent years lobbying President Donald Trump to ease export restrictions, finding allies in sympathetic government figures such as Trump’s former AI czar, David Sachs.
While hawkish voices argued that China should not have access to cutting-edge American technology for national security reasons, Huang and like-minded executives argued that China already has the computing power to advance in AI, and that broader adoption of American technology would help it maintain its lead in the field.
Jensen Huang’s lobbying efforts are currently under intense scrutiny following allegations that former Megaspeed executive Alice Fan, with whom he had an affair, was an agent recruited by China’s Ministry of State Security.
China’s Ministry of Foreign Affairs denied the allegations, calling them “totally baseless and speculative, and aimed at defaming and defaming China.”
Alice Hwang has not publicly commented on the allegations, which were first reported by the New York Times and the Financial Times, citing unnamed U.S. intelligence officials.
Nvidia’s board on Sunday launched an investigation into Jensen Huang’s relationship, pledging to review “all available information” and expressing confidence in the CEO.
Jensen Huang, who co-founded Nvidia in 1993, pledged to fully cooperate with the investigation and expressed his determination to protect Nvidia and the national security of the United States.
Meanwhile, President Trump said the FBI was also investigating whether Mr. Hwang’s case led to any compromise of U.S. national security.
Already, U.S. lawmakers are stirring up the controversy and calling for tighter restrictions on China’s access to U.S. chips.
Democratic Sen. Elizabeth Warren and Republican Sen. Jim Banks on Monday called on the U.S. Congress to take “decisive action” and pass the AI Surveillance Act, which would give lawmakers the power to scrutinize and potentially halt exports of advanced chips to China and other adversaries.
“The Commerce Department should complement these efforts with immediate action to close export control loopholes and prevent advanced AI chips from falling into the hands of China’s military,” Warren and Banks said in a joint statement.
Democratic Rep. Bill Foster also addressed his relationship with Jensen Huang in a statement Monday, calling on his colleagues to get the Chip Security Act “across the finish line.”
The bill, co-sponsored by Republican Rep. Bill Huizenga, aims to prevent illegal smuggling into countries such as China by taking steps to track the location of chips sent overseas.
Louis Ma, a tech industry consultant and founder of Tech Buzz China, said proponents of tighter regulation now have a “stronger political argument” and are likely to use it.
“Chip exports to China are highly divisive in Washington, and Huang is one of the strongest advocates for keeping the market open,” Ma told Al Jazeera.
“If this investigation weakens his influence, regardless of the final findings, those pushing for stricter regulation will be in an even stronger position,” she said.
Since returning to the White House, Trump, who has forged close ties with Jensen Huang, has taken several steps to make it easier for semiconductor manufacturers to do business with China, while maintaining significant export controls.
Last May, the U.S. Department of Commerce announced it would repeal the Biden administration’s AI diffusion rule, which imposed caps on chip exports to more than 100 countries, including some U.S. allies.
In December, President Trump announced that he had given Nvidia permission to sell its second most powerful chip, the H200, to China under an arrangement in which 25% of sales would go to the U.S. government.
Nvidia, which controls an estimated 80% to 90% of the graphics processing unit (GPU) market used to run Frontier AI, welcomed the decision at the time, saying it “will support high-wage jobs and manufacturing in the United States.”
Meanwhile, President Trump is resisting calls for permission to export Nvidia’s top-of-the-line Blackwell chip, which has about 2.5 times the performance of the H200.
Eric Gruenewald, a senior fellow at the Institute for AI Policy and Strategy, a think tank based in Washington, D.C., told Al Jazeera: “Recent events have increased attention to export control loopholes and are likely to add momentum to bills already being debated in Congress, such as the Chip Security Act.”
Export controls have been controversial, but their effectiveness has been called into question as China steadily advances AI development.
Authorities and analysts have extensively documented regulated chip smuggling into China, primarily through Southeast Asia.
Epoch AI estimates that 1.6 million chips with the computing power equivalent of an Nvidia H100 were exported to China in violation of export regulations through the end of 2025.
Chinese companies have also been able to circumvent U.S. laws by remotely accessing computing power provided by Nvidia-powered data centers in countries such as Singapore, Malaysia and Thailand.
Gabriel Wildow, managing director at global business advisory firm Teneo, said claims that Mr. Hwang was involved in espionage warranted being treated with skepticism, given the anonymous leaks and the motive to discredit him and his company.
“While there is no indication that President Trump intends to disrupt the current U.S.-China relationship, he may face renewed pressure from Congress and hawkish voices within his administration to address the remote access issue,” Wildau, who focuses on China political risk analysis, told Al Jazeera.
President Trump and Chinese President Xi Jinping have already met twice this year, with the US president visiting Beijing in May and the Chinese leader reciprocating with an official visit to Washington in September. The two are scheduled to meet again next week when President Trump visits Shenzhen for the Asia-Pacific Economic Cooperation (APEC) summit. A fourth meeting is scheduled for December 2026, when President Trump will host the G20 summit in Miami.
“The risk is that the United States acts to close this loophole (in the aftermath of the Hwang controversy) and Beijing views this action as a violation of the bilateral ceasefire,” Wildau said, referring to the trade ceasefire that Trump signed with Xi during a summit in South Korea last year.
Chris Craig, an associate fellow at the International Institute for Strategic Studies in London, said the revelations about Jensen Huang would inevitably undermine “legitimate” arguments in favor of allowing technology transfers between the United States and China.
“This made it easier for his detractors to poke holes in that,” Clague told Al Jazeera. “This shows that the tensions that exist between the United States and China will never go away, but it should not preclude efforts to find some compromise.”
