Scott Seeks Huang and Lutnick Testimony Before Senate, Sets December Dates

Key Facts

Tim Scott, chairman of the U.S. Senate Banking Committee, requested on Nov. 12 that Jensen Huang and Howard Lutnick testify about developments involving Nvidia, according to Reuters. Scott set Dec. 3 for Huang to appear and Dec. 10 for Lutnick, according to Bloomberg Law. Scott said, "Recent reports raise serious concerns about our national security and the protection of sensitive American technology." The invitations come as lawmakers scrutinize the handling of the company's chip exports to China and the protection of U.S. technology. Scott asked the two men to appear voluntarily before the committee, while leaving open the possibility of using its legal powers if they do not respond.

Scott's letter warned that the committee was prepared to use "all tools available to us, including judicial subpoenas" if the invitees did not appear voluntarily, according to Bloomberg Law. The move follows requests by House committees to interview Huang; Foreign Affairs Committee Chairman Brian Mast said the initial request was made on Nov. 5. Mast added that Huang had expressed willingness to take part in an interview with House committees, while a judicial subpoena remained an option to compel his appearance. Lawmakers said they wanted a briefing from him on his interactions with a Chinese businesswoman and the company's security protocols to counter foreign espionage. China, according to the Associated Press, said it had not tried to entrap Huang.

Lawmakers' criticism focused on the administration's refusal to add dozens of Chinese companies to a U.S. trade blacklist and on whether government oversight of Nvidia's exports to China is sufficient, according to Reuters. This reflects a widening debate, from interview requests to export rules and oversight of advanced chips. The Senate version of the defense bill included provisions giving Congress broader authority over artificial-intelligence chips bound for China. The provisions also urge allies to restrict sales of semiconductor manufacturing equipment to China and require companies to track their chips overseas to combat smuggling. This puts chip exports and their controls among the issues that could face greater legislative scrutiny.

Nvidia said it saw no reason to believe national security or company secrets had been compromised and that it would examine the available information. In a separate development in investigations related to Alice Huang, Singaporean authorities said their investigation concerned suspected potential violations, not espionage, and returned her passport after concluding there was insufficient evidence that she had committed an offense. Singapore had barred her from returning after an investigation into suspected inaccurate declarations concerning server purchases, according to the Associated Press. U.S. Attorney General Todd Blanche said the department had not yet reached a conclusion on whether Alice Huang was a spy. Lawmakers' questions about the company's security procedures remain separate from Nvidia's stated position on any breach of secrets or national security.

The testimony request coincided with Huang's resignation as chief executive, which Nvidia announced on Nov. 12 and which took effect immediately. The company said Chief Financial Officer Colette Kress would become interim chief executive and that it was considering internal and external candidates for a permanent chief. The board also appointed Harvey C. Jones as its first chairman. Nvidia shares closed at $166.19 in the Nov. 12 session, after falling more than 4% at the close, according to the Associated Press and EL7 data. The stock was down 5.3% at 10:30 a.m. Eastern time, after declining at the market open.

Before the latest decline, Nvidia shares set a record in the previous month after rising 1,722% over four years, but had fallen more than 30% from their peak as of Nov. 12, according to the Associated Press. Reuters reported that AI-linked stocks fell on Thursday following Huang's departure. By contrast, Broadcom, Intel and AMD shares rose in the same session, amid investor expectations that Nvidia customers would diversify their suppliers, according to the Associated Press. Senator Jack Reed called for an assessment of whether Nvidia was "too big to fail" and an analysis of the impact a potential setback could have on U.S. banks and credit markets. Reed said millions of Americans have economic exposure to the company through retirement accounts and pension funds. The December dates are set to mark the Senate committee's next step, as House committees continue seeking a briefing from Huang.