Senators Banks and Warren Urge Commerce Secretary Lutnick to Suspend or Reconsider NVIDIA Export Licenses Amid Supermicro Chip Diversion Indictment

Senators Banks and Warren Urge Commerce Secretary Lutnick to Suspend or Reconsider NVIDIA Export Licenses Amid Supermicro Chip Diversion Indictment

"Every chip that reaches Beijing through a Malaysian shell company or a Thai front entity is a chip that should never have left the country."

"We are concerned about these revelations, and the implication that the Bureau of Industry and Security can no longer base licensing decisions on assurances from executives who have a financial stake in the outcome."

Text of Letter (PDF)

Washington, D.C. - U.S. Senators Jim Banks (R-IN), a member of the Senate Banking, Housing, and Urban Affairs Committee, and Elizabeth Warren (D-Mass.), Ranking Member of the Committee, wrote to Secretary of Commerce Howard Lutnick, requesting immediate action after the Department of Justice indicted three individuals linked to Super Micro Computer, Inc. (Supermicro) - including a company co-founder - for allegedly conspiring to export approximately $510 million in servers loaded with restricted Nvidia AI chips to China through a network of shell companies and overseas front entities.

The senators are urging the Department of Commerce's Bureau of Industry and Security (BIS) to immediately pause and conduct a full review of all active export licenses covering advanced Nvidia AI chips and server systems destined for China and Southeast Asian countries, including Malaysia, Thailand, Vietnam, and Singapore. They also raised concerns about statements Nvidia's Chief Executive Officer, Jensen Huang, made last year while actively lobbying against export restrictions, including his statement that "(t)here's no evidence of any AI chip diversion."

"The stakes here are not abstract. The Chinese Communist Party's Military-Civil Fusion policy means that chips acquired for commercial AI work can be redirected to serve the People's Liberation Army. Advanced processors power the surveillance networks, autonomous weapons systems, and military command infrastructure that China is building to challenge American power," wrote the Senators. "Additionally, the scale of alleged fraud and diversion in Southeast Asia among key Nvidia partners raises serious concerns that the company's compliance and monitoring processes may be grossly inadequate to protect cutting-edge American technology from foreign adversary access."

"If Nvidia could not detect and prohibit non-China customers from allegedly illegally diverting GPUs bound for Southeast Asia to China, it is extremely implausible that it can meet existing end user/use control requirement for chips shipped directly to China. Nvidia's due diligence responsibilities under the EAR cannot be waived or outsourced," they concluded. "American export controls exist to protect American national security. They only work if the companies subject to them follow the law and meaningfully, aggressively monitor their supply chains. We are concerned that the recent Supermicro indictments raise serious questions about Jensen Huang's public assurances and the Department of Commerce should treat them accordingly."

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