Nvidia scandal puts US-China AI rivalry under spotlight ahead of Trump-Xi meeting

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As Trump prepares to meet with Xi, lawmakers on both sides are seizing on the affair to press for tighter restrictions on technology exports. | World News

Well before reports emerged that former Nvidia CEO Jensen Huang was having an affair with a suspected Chinese spy, the advanced chips made by his company were at the centre of the race between the US and China to dominate artificial intelligence.

As President Donald Trump prepares to meet with Chinese President Xi Jinping next week in China, lawmakers on both sides of the aisle in Congress are seizing on the affair to press for tighter restrictions on technology exports to protect America's edge.

"The scandal, in many ways, encapsulates the rivalry, where concerns around national security, export control, and foreign policy get intertwined," said Lian Jye Su, a chief analyst at London-based technology research and advisory group Omdia.

At the heart of the competition to build the most advanced artificial intelligence is the race to access the most powerful AI chips. US-led restrictions have barred China from getting the world's most advanced AI chips, a strategy that has led Beijing to accuse the US of pursuing an AI monopoly.

Once commanding some 95 per cent of market share in China, Nvidia's sales to China have plummeted due to the export restrictions, first applied during the Biden administration. After Huang lobbied Washington to loosen the limits on sales of Nvidia chips to China, Trump earlier this year greenlighted the export of its highly-advanced, though not the most powerful, H200 chips.

Trump has spoken admiringly of Huang - a man at the center of the AI boom Trump has been keen to promote - and the two have talked regularly during his second term, including at least twice this week as the scandal grew around the tech executive.

The strategy in Washington has been largely focused on hardware, with officials believing if they controlled where California-based Nvidia's best chips go, they'd be in control of the race for the most capable AI, said Shaoyu Yuan, an assistant professor at New York University's Center for Global Affairs.

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