Nvidia Closes Down 4.3% as Senate Banking Chair Seeks Testimony on Chip Exports
Key Facts
On November 12, Tim Scott, chair of the U.S. Senate Banking Committee, sent letters to Commerce Secretary Howard Lutnick and Jensen Huang, Nvidia’s former CEO, seeking their testimony before the committee on recent developments at the company. Scott said recent reports raise serious concerns about national security and the protection of sensitive U.S. technology. The request puts oversight of exports of advanced AI chips to China at the center of the committee’s action. Scott’s announcement was not a legal subpoena; he said he may consider subpoenaing Huang if he does not appear voluntarily. The move came as the company’s stock fell during the same trading session.
Scott’s request coincided with a separate move by Senators Elizabeth Warren and Chris Coons, who on November 11 asked the administration to preserve records related to exports of advanced AI chips to China and the associated security risks. Their request cited reports about Singapore-based Megaspeed, which they said had bought more than $4.8 billion in Nvidia advanced AI chips since June 2024. The senators’ statement cited reports that the company is under a Justice Department investigation over the possible diversion of chips to China in violation of U.S. export controls. The allegations about diversion remain under investigation, while Scott’s request addressed national security and sensitive-technology concerns. Warren and Coons requested written confirmation by November 17 that preservation instructions had been issued, along with a congressional briefing on potential risks.
Warren and Coons said reports indicate government officials were aware of concerns about Nvidia and its relationship with Megaspeed, but did not stop the flow of advanced chips to the company or to other firms linked to the suspect. They wrote that “questions remain about taking prudent defensive counterintelligence measures or following national security recommendations.” This puts enforcement of export controls and monitoring of chip recipients at the center of the Senate’s oversight effort. In June, Warren said Huang had declined an invitation to testify at a public committee hearing on AI and the American Dream, and that minority staff had contacted Nvidia to arrange another date for public testimony. Scott’s new request follows that context, but seeks testimony from Huang as the former CEO and from Lutnick as commerce secretary.
Nvidia shares closed at $166.19 on November 12, compared with a close of $173.73 on November 11 and $168.89 on November 10. Reuters reported that the stock ended the November 12 session down 4.3%, before recovering 1% in after-hours trading. In the same session, AMD and Broadcom shares each rose about 6%, according to the report. Democratic Senator Jack Reed said Congress should consider whether Nvidia is “too big to fail” and what that could mean for banking and credit markets. He added that millions of Americans have economic exposure to the company through retirement accounts and pension funds, linking scrutiny of the company to broader risks for investors and savers.
The congressional scrutiny is unfolding alongside other actions related to enforcement of export restrictions. In October, the Justice Department announced the arrest of a California technology company owner, accusing him of smuggling export-controlled servers worth more than $300 million to China, according to the indictment; the charge remains unresolved in court. Among the near-term deadlines set by the current effort, Warren and Coons requested confirmation of record preservation by November 17. Nvidia also said a company meeting would be held on November 18, according to a staff memo by Chris cited by Reuters. These dates put the follow-up on records and the company’s position in the coming days among the developments expected after the testimony request.