A forecast said U.S. curbs on semiconductor exports to China could tighten further as spy suspicions surrounding Nvidia CEO Jensen Huang (젠슨 황) intersect with the Democrats’ victory in U.S. midterm elections.

On Nov. 10, the South China Morning Post reported an analysis that the two developments could add momentum to moves in the U.S. Congress to close loopholes in existing chip export controls. It said lawmakers may seek to block chip smuggling via third countries and prevent Chinese companies from using overseas cloud computing resources.

The controversy and the midterm election result could increase pressure to tighten export controls and expand enforcement, the report said. It also said Huang and Nvidia’s lobbying to ease restrictions on GPU sales to China could be interpreted as linked to the possibility of influence by a foreign government.

The controversy also provided grounds for Congress to examine whether corporate executives’ access to the White House affected export policy decisions or responses tied to national security. With bipartisan moves already in place ahead of the midterms to strengthen limits on technology transfers to China, the election result and the controversy surrounding Huang could further bolster the push for tighter regulation.

That could also add momentum to efforts to advance related bills, including the Remote Access Security Act and the AI OVERWATCH Act, the report said. The Remote Access Security Act would bring remote access by some foreign entities to U.S. computing technology under export controls, and it passed the House in January but was not taken up by the Senate.

If access to overseas computing resources is restricted, China’s development of artificial intelligence is expected to take a hit. After direct exports of U.S.-made advanced processors were blocked, Chinese big tech companies have used overseas data centres to train advanced AI models. Washington-based think tank the Institute for Progress cited 4 routes for Chinese companies to secure advanced computing resources: domestically made chips, legally imported lower-spec U.S. chips, smuggling and remote access to overseas data centres.

Computing resources directly affect AI model performance and the pace of development. Resource shortages are cited as one reason China lags behind leading U.S. AI labs. Another analysis said some Chinese hyperscalers cut investment due to a lack of computing resources despite strong demand. Huawei’s Ascend series is improving, but it is difficult to fill the gap in a short period, the report said. If the United States blocks related routes, demand would surge, but Huawei lacks spare production capacity to handle it, another analysis said.

Still, it is not easy for the United States to block all workarounds. Lizi C. Lee of the Asia Society Policy Institute’s Center for China Analysis, a China economy fellow, explained that complex global supply chains involve distributors, third-country brokers and resellers, making it hard to track the ultimate users of chips. Limiting overseas cloud use would also require cooperation from Singapore, Malaysia and the United Arab Emirates, which host data centres. The report said those countries have their own economic interests.

Separately, Nvidia’s board said it would begin an independent probe related to reports that Jensen Huang became a target of a foreign intelligence agency’s operation. The New York Times reported that a U.S. intelligence agency suspected that a woman who built ties with Huang may have collected information for China. The Chinese government denied it as baseless smears. Nvidia said there was no basis to believe national security or company secrets were compromised and that Huang would cooperate with the investigation.