WASHINGTON: The scandal engulfing Nvidia chief executive Jensen Huang could have its biggest consequences in Washington, where China hawks are seizing on the affair to push a hard line that had been put on the back burner under President Donald Trump.
Huang, who co-founded Nvidia and turned it into the world's leading supplier of the processors that power artificial intelligence, admitted on Sunday (Nov 9) to an affair with Alice Huang, a former executive at Singapore-based Megaspeed whom US intelligence officials believe was working for Chinese intelligence.
Trump, who has relied on Huang as an adviser on AI, called him "an honourable guy" and said Huang told him he had no idea the woman was a spy.
Huang has spent years lobbying against curbs on sales of advanced AI chips to China, and Trump last year cleared Nvidia's H200 chips for export there over objections from hawks in both parties.
"China hawks in policy circles in Washington DC were quite frustrated with the decisions and really wanted to see a more aggressive approach around export controls to China," said Aalok Mehta of the Center for Strategic and International Studies.
"They will now see some fruits of their efforts."
Many in Washington see the United States as locked in a Cold War-style race with China for technological and military dominance, and these hawks have bristled at Trump not conforming to that.
"What we are heading into is one of the most serious investigative efforts in a substantial period," said Kurt Campbell, a former US deputy secretary of state and co-founder of consultancy The Asia Group.
Lawmakers will want to know when the government learned of the alleged links, whether the president was warned and whether the contacts shaped his China policy, Campbell said.
The New York Times has reported that Secretary of State Marco Rubio confirmed the allegations to Trump in May, but the president chose not to act.
Nvidia committed US$25 million to Trump's White House ballroom - among the largest donations - months after securing his approval to resume chip sales to China, The Washington Post reported. Nvidia has said the gift was independent of its business interests.
Three Republican House committee chairs have asked Huang to attend a closed-door briefing on November 18 about his dealings with Alice Huang and Nvidia's safeguards against espionage.
Not 'invincible'
Kyle Chan, a fellow at the Brookings Institution's John L. Thornton China Center, said Republicans long feared crossing Trump.
But with the party having lost control of Congress and Trump "no longer this seemingly invincible political brand," some may feel freer to break with him, Chan noted.
That could revive the AI Overwatch Act, a bipartisan bill that would let Congress review and block licences to export advanced AI chips to China and other adversaries.
The revelations have given hawks "new enthusiasm" to push through the stalled annual defense authorisation bill with export control measures attached, said Emily Benson, head of strategy at Minerva Technology Futures.
The key question is Trump, she said, who holds a veto that only two-thirds majorities in both chambers can override.
Commerce Department staff have also pushed for new rules, including curbs on Chinese remote access to advanced AI chips, but Commerce Secretary Howard Lutnick will not act without Trump's instruction, tech news outlet The Information reported.
The department has already drawn scrutiny for reportedly halting a probe into Megaspeed's dealings with Nvidia.
Tighter rules risk upsetting the trade truce Trump and Chinese leader Xi Jinping reached last year.
Export control legislation seen by Beijing as targeting China "would almost certainly invite swift retaliatory action by Beijing to destabilise US supply chains," Benson said.
The FBI is looking into the spying allegations, Trump said, while the Justice Department is investigating whether Megaspeed smuggled Nvidia chips into China, NBC News reported.
Megaspeed denies smuggling, and Beijing has dismissed the spying claims as smears.
If wrongdoing were found and Huang forced out, "that would have huge implications for AI in the US, given that he has played such a pivotal role in pushing forward Nvidia but also the whole industry," Chan said.
But even short of Huang's downfall, "Nvidia's traction within the halls of Congress and within the administration is likely to be significantly reduced or completely eliminated," Mehta said. - AFP
