Key Takeaways
- Sens. Elizabeth Warren and Jim Banks and Hakeem Jeffries want new China chip limits in this year’s defense bill, days after Nvidia’s board opened a probe involving CEO Jensen Huang.
- Stephen Witt, who wrote a book on Huang and Nvidia, expects Nvidia to be shut out of China for good.
- Nvidia’s October-quarter guidance assumes no China data center compute revenue.
- At 15x forward earnings, its lowest in five years, the stock looks cheap for a company already guiding without China data center compute.
Nvidia (NVDA) reportedly got its way on China chip limits in last year’s defense bill. Congress is trying again, and this time lawmakers have the board’s investigation into reports that CEO Jensen Huang was the target of a foreign intelligence effort on their side.
On Monday, Sens. Elizabeth Warren (D-Mass.) and Jim Banks (R-Ind.) said, “It is time for Congress to take decisive action to pass key bills like the AI Overwatch Act in the NDAA,” the annual defense bill. Hakeem Jeffries, expected to become House speaker in January, backed the Senate’s chip provisions the same day: “We’re going to work hard to make sure that those provisions make it into the final version.”
Stephen Witt, author of The Thinking Machine, went further on Tuesday’s Hard Fork. He said Huang “can never talk about China or export restrictions again without sounding like a fool.” His prediction: “I imagine NVIDIA will in short order not be able to sell anything to China ever again.”
Nvidia’s Fight Looks Harder This Year
The Senate bill carries three measures: the AI Overwatch Act (congressional review of advanced AI chip licenses for China and other countries of concern), the Chip Security Act (chips must verify their location) and the MATCH Act (allies curbing chipmaking-equipment sales to China).
The AI Overwatch Act’s backers include Chuck Schumer, expected to lead the Senate next year, and Veda Partners told clients Monday that “the odds have increased” for tougher export controls in the NDAA. None of it is law, and President Trump called Huang an “amazing guy” Monday. But Democrats take over Congress in January.
Both Routes Into China Are in Congress’s Sights
The New York Times reported that Commerce has approved dozens of Chinese companies to handle Nvidia’s H200s, some tied to sanctioned firms. I’d expect those H200 sales to be the first casualty of license review.
Then there are chips already getting in. Bloomberg reported Tuesday that Moonshot AI signed a contract in August to rent 32 Super Micro servers with Nvidia B300s, valued at 432 million yuan ($64.8 million). Moonshot disputed the documents, and Nvidia said the companies involved “are not Nvidia customers.” At about $2 million a server, demand clearly hasn’t gone away.
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China Is Already Out of Nvidia’s Guidance
Hopper shipments to China were under 1% of data center revenue in the quarter ended July 2026, and the $108.0 billion October-quarter guidance assumes no China data center compute sales. Analysts still expect revenue to more than double, from $412 billion in the year ending January 2027 to $904 billion in fiscal 2029:
Tighter licensing would make a comeback harder. Customers headquartered in China, including Hong Kong, brought in $19.7 billion in the year ended January 2026, down from $25.0 billion. The bigger risk is reach: if license reviews cover other countries of concern, political approval becomes part of sales well beyond China.
Nvidia Stock Looks Cheap at 15x
At 15x forward earnings, Nvidia trades well under its five-year average of 36x. The board’s probe has no completion date, and House Republican committee chairs want Huang at a closed-door briefing on Nov. 18, the day after Nvidia reports.
Witt is probably right that Nvidia is done in China. But at 15x, the stock looks cheap for a company already guiding without China data center compute, even if longer-term estimates still count on some recovery there. License review spreading past China is the real threat, so I’d read the final bill as closely as the Nov. 17 report.
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