Analysts warn US may tighten AI chip export controls after Nvidia CEO scandal

Allegations that a woman associated with Nvidia chief executive Jensen Huang was a Chinese intelligence operative have raised concerns that the United States could enforce its export restrictions on advanced artificial-intelligence chips more rigorously, analysts told CNA. The claims involve Alice Huang, a Chinese businesswoman and former executive of Singapore-based cloud firm Megaspeed, which is also under investigation for allegedly helping Chinese companies obtain restricted AI chips. Singapore police are probing possible breaches of domestic law, while China has dismissed the accusations as unfounded.

Alex Capri, a senior lecturer at the National University of Singapore Business School, said cloud-computing services have long been a loophole in US chip export controls because they allow users to rent computing power without directly purchasing the chips. "I think we're going to see a major crackdown on these cloud computing companies," Capri told CNA's Asia First on Wednesday. He added that the close ties between major technology firms and the US defence establishment could force governments and businesses to rethink cooperation on enforcing restrictions.

Capri expects increased pressure from Washington on Singapore and Malaysia, both of which serve as trading and transit hubs for advanced AI chips. In Singapore, four individuals and four companies face fraud-related charges in a separate case involving servers believed to contain Nvidia chips that were shipped to Malaysia. Malaysian customs recently seized 30 servers with advanced AI chips worth about US$12.1 million at Kuala Lumpur International Airport as part of a smuggling investigation.

Jay Goldberg, senior semiconductor analyst at Seaport Research Partners, said tighter restrictions could benefit Nvidia rivals such as AMD and Broadcom, as well as Chinese firms like Huawei. He noted that AMD and Broadcom have relatively limited exposure to China, making them less vulnerable to stricter US controls. Capri also warned that Beijing is likely to accelerate its own semiconductor development, and that the scandal could further motivate China’s push for chip self-sufficiency.

Nvidia shares fell more than 5 percent after the allegations surfaced, but Goldberg does not expect demand for the company's chips to weaken in the near term, citing existing customer commitments. "People still want Nvidia chips. There's still a huge demand," he said. Nvidia is slated to report quarterly earnings on Nov 17, and US lawmakers have asked Huang to attend a closed-door briefing on Nov 18. Goldberg cautioned that uncertainty about Huang’s future could overshadow the company’s financial results, noting that replacing him would be difficult because of his central role in Nvidia’s leadership and decision-making.