Nvidia Faces Bipartisan Heat Over Its Shanghai Facility Amid 'Significant' National And Economic Security Threat: Report

Nvidia Corporation NVDA is reportedly facing bipartisan criticism from U.S. senators over its plans to establish a facility in China, with concerns raised about the potential transfer of advanced technology to the country.

What Happened: Senators Jim Banks (R-Ind.) and Elizabeth Warren (D-Mass.) have written to Nvidia’s CEO Jensen Huang expressing their apprehensions about the company’s Shanghai facility, reported The Wall Street Journal on Thursday. The senators have asked for a detailed timeline and overview of the facility's plans, including specific research and engineering initiatives, as well as any financial incentives involved.

The facility "raises significant national security and economic security issues that warrant serious review," the Senators wrote in the letter. 

An Nvidia spokesperson stated that the company is only leasing a new space for its existing employees, with no plans to send advanced chip designs to the facility. The company is currently navigating the U.S.-China tech war and has been criticized by China hawks for its overseas activities.

The company is trying to balance access to the world’s two largest economies while adhering to export restrictions. Nvidia’s overseas moves are under scrutiny due to fears that its artificial intelligence chips could fall into the hands of adversaries.

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Why It Matters: Earlier this month, reports emerged that Nvidia is considering a site in Shanghai for an R&D center. As per Reuters, U.S. chipmaker Nvidia began site scouting in early 2025, focusing on Shanghai’s Minhang and Xuhui districts. The project accelerated following a surprise visit to China by CEO Jensen Huang last month.

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Nvidia’s relationship with China has been a topic of discussion in the past. In May 2025, Nvidia CEO Jensen Huang criticized U.S. chip export curbs as counterproductive to America’s technological leadership. He praised Chinese artificial intelligence researchers as “world-class”.

On Wednesday, Nvidia reported a strong first quarter, despite the China export ban impacting results. Huang stated that demand was ‘incredibly strong.’ This shows the importance of the Chinese market to Nvidia’s business.

Nvidia stock climbed 5.1% in the Thursday pre-market. Over the past year, it surged 17.4%, as per data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.