Nvidia Shares Fall 4.3% as US Calls Grow to Restrict Chip Exports
Key Facts
Jensen Huang resigned immediately as Nvidia’s chief executive, company chair and board member, as pressure grows in Washington to restrict China’s access to advanced AI chips. The company named Chief Financial Officer Colette Kress interim chief executive and began searching for a permanent successor. The departure came as US lawmakers discuss the annual defense authorization bill, amid growing calls to tighten restrictions, according to the South China Morning Post. House Speaker Mike Johnson said there was “growing consensus in Congress to limit semiconductor exports to China.” Reuters reported that lawmakers from both parties are seeking tighter restrictions on China’s access to advanced chips, with some trying to attach their proposals to the authorization bill.
The Senate version of the defense authorization bill includes three related proposals: the AI Overwatch Act, the Chip Security Act and the Match Act, Reuters reported. The first proposal gives Congress a greater role in reviewing changes to export rules. Senators Jim Banks and Elizabeth Warren had called in a joint statement issued before Huang’s resignation for the act to be passed as part of the defense authorization bill. They also called on the Commerce Department to close export control loopholes immediately. Before Huang’s departure, Warren and Senator Chris Coons asked President Donald Trump’s administration to preserve documents related to Nvidia chip exports to China, saying the matter raised concerns about enforcement of restrictions and national security.
Nvidia shares fell 4.3% on Thursday, after dropping about 14% at the open before paring losses, according to the Associated Press. Shares of major rivals, including Broadcom, Intel and AMD, rose in the same session as investors anticipated companies diversifying their customers among chip suppliers. Nvidia stock had reached a record high the previous month after rising 1,722% over four years, but had fallen more than 30% from that level before the resignation announcement. The move reflects the leadership decision coinciding with a period in which the stock had fallen sharply from its peak, alongside growing political scrutiny of the company’s exports. The company gave no explanation for the resignation in its transition announcement, but said its operations, customer commitments and product roadmap would continue without interruption.
Potential restrictions matter to China because its AI developers rely heavily on Nvidia’s ecosystem, according to the Associated Press. Lizzi Lee of the Asia Society Policy Institute said Chinese companies could “accelerate efforts to secure overseas computing capacity before restrictions tighten.” Political economy professor Ling Chen believes the implications of allegations involving Huang could strengthen calls for a tougher US approach to AI chip exports. At the same time, the incident could prompt elected officials to seek stronger controls on US chips, potentially benefiting China’s Huawei, the Associated Press reported. Nvidia’s revenue from chip sales to Chinese data centers was “close to zero,” Reuters reported, citing a company statement in August, and the company did not expect that to change in the third quarter.
Singaporean investigations related to Nvidia customer Megaspeed and six individuals are continuing, according to Singapore’s Ministry of Home Affairs, which said the investigation into Alice Huang was not related to espionage. Alice Huang, then Megaspeed’s chief executive, was present when the US Bureau of Industry and Security conducted a shipment verification check at the company in June 2025, Reuters reported. This comes against a backdrop of scrutiny of chip shipping routes and compliance with export controls. Nvidia is scheduled to report its third-quarter fiscal 2027 results on November 17, at about 1:20 p.m. Pacific time, according to its announced schedule. The results announcement will be followed by an earnings call at 2 p.m. Pacific time, while the company says the leadership transition will not interrupt its operations or customer commitments.