The scandal that ended Jensen Huang's run as Nvidia's chief executive has given new life to three U.S. bills that would tighten China's access to American AI chips, including the Chip Security Act, which would require companies to track where their chips end up. Lawmakers and advocates said the measures are now more likely to pass, Reuters reported on Monday, Nov. 9, after reports that Huang had a relationship with a woman U.S. officials reportedly suspect of gathering information for Beijing.

For Asian investors, the stakes go beyond one company. The bills target the routes through which advanced chips reach China, and Southeast Asian data center hubs in Singapore and Malaysia sit on those routes. Any new tracking duty would fall on the suppliers, cloud operators and distributors that move Nvidia hardware around the region. The Singapore company at the center of the case is covered in our Megaspeed explainer; this article looks at the policy fallout.

Three bills ride on the defense bill

The three measures are the AI Overwatch Act, which would give Congress power over advanced chip exports; the Chip Security Act, which would make businesses track their chips to fight smuggling; and the Match Act, which would push U.S. allies to restrict more chipmaking equipment sales to China, according to Reuters. The House Foreign Affairs Committee advanced all three earlier this year, and they are now in the Senate's management package for the fiscal 2027 National Defense Authorization Act.

Location tracking is the core of the Chip Security Act. When the committee was preparing to vote in March, Tom's Hardware described the bill as requiring location tracking on advanced AI chips to make diversion harder. Rep. Bill Foster, the Illinois Democrat who introduced it with Republican Rep. Bill Huizenga, said it cleared the House committee unanimously. "It's time to get it across the finish line," Foster told Reuters.

A separate bill from Sens. Jim Banks, an Indiana Republican, and Elizabeth Warren, a Massachusetts Democrat, would bar Nvidia from selling Chinese buyers any chip more powerful than the H200 for a set period, The Next Web reported on Nov. 10. Lawmakers want those provisions in the annual defense bill, which usually passes in December. House Democratic leader Hakeem Jeffries said lawmakers would "make sure that those provisions make it into the final version," according to the outlet.

Opposition remains. A former congressional staffer told Reuters that Nvidia is considered the biggest opponent of the Chip Security and AI Overwatch acts, and the Information Technology Industry Council, a trade group whose members include Nvidia, opposes the measures. Chris MacKenzie of Americans for Responsible Innovation, an advocacy group, said the hurdle is "getting the White House onboard." The White House did not comment, and Nvidia declined to comment, Reuters said.

Commerce under pressure on licenses

Banks and Warren have also asked the Commerce Department to "suspend or reconsider" Nvidia's China export licenses, The Next Web reported. In a joint statement cited by Reuters, they said Huang's relationship "makes these national security concerns even more urgent." The pair had already written to Commerce Secretary Howard Lutnick in March, after a Super Micro smuggling indictment, asking him to halt Nvidia GPU exports to China and to intermediaries in Malaysia, Thailand, Vietnam and Singapore, Tom's Hardware reported.

Commerce has not publicly answered the latest request. A spokesman for its Bureau of Industry and Security, which enforces export rules, said only that "BIS conducts all enforcement strictly by the book," The Next Web reported in its coverage of the Megaspeed case.

The licenses in question cover the H200. Huang won U.S. approval to sell the H200 in China this year, the AP reported. Terms formalized in January require each chip to pass through U.S. territory for third-party inspection before re-export, with Nvidia paying the U.S. Treasury a 25% fee on each sale, Tom's Hardware reported. By May, Commerce had cleared about 10 Chinese firms, including Alibaba, Tencent, ByteDance and JD.com, but no chips had shipped.

Nvidia's China sales were already thin

That limits the direct revenue at risk. Huang has said Nvidia's share of the Chinese market fell from about 95% to essentially zero, and the company's $78 billion revenue guidance assumed no H200 recovery from China, Tom's Hardware reported in May. Analysts estimated that a working export framework could add back $3.5 billion to $4 billion a year. Nvidia's August filing said it had sold only a small amount to China because Beijing restricts such purchases, the Associated Press reported. Before the H200, Huang had lobbied for the H20, a chip designed for China to comply with U.S. rules.

Beijing has been the main brake. Lutnick said in April that China was making it hard for its companies to get import permission in order to protect domestic chipmakers, and Tom's Hardware reported that customs officials had been told to block H200 imports. After his May summit with Xi Jinping, President Donald Trump said China "chose not to" approve purchases.

Beijing denies the spy claims

China has rejected the allegations at the center of the scandal. Foreign Ministry spokesman Guo Jiakun called the spy allegation "unsubstantiated" and a smear against China, the AP reported on Nov. 9. He had dismissed the original New York Times report in October as an attempt to smear China, Euronews reported. Chinese state media have largely repeated the official line, and the Global Times suggested the report was meant to destabilize U.S.-China relations, according to the AP.

Nvidia has said it complied with export laws, Reuters reported, and in October a company spokesperson said allegations that Megaspeed smuggled chips to China had been investigated and debunked the previous year, Euronews reported.

Capital Times has also reported on the House chairs' request for a Huang briefing. The next markers are Nvidia's third-quarter results on Nov. 17, its first report under interim CEO Colette Kress, and the final text of the defense bill, which Congress usually passes in December.