Nvidia CEO Jensen Huang has never voiced his belief that the U.S. should continue to sell AI chips to China rather than shutting it out of the technology. The revelation that he had an affair with a suspected Chinese spy threatens to complicate that debate.
The Financial Times reported on Friday about Nvidia’s relationship with Alice Huang, a former executive at Megaspeed, a customer of Nvidia. Jensen Huang admitted to the affair on Sunday and apologized in a memo to the company. U.S. intelligence officials believe Alice Huang was recruited by Chinese intelligence to gather information about the CEO and influence the company’s efforts to ease chip export restrictions.
Nvidia’s independent directors are working with outside counsel to investigate the matter, and Congress is already seeking answers.
The controversy comes at a sensitive time for Nvidia. Historically, China has been a big market for the company. It has been shrinking in recent years due to strict export controls in the United States and China’s aggressive promotion of domestic substitutes. For the three months ended July 26, NVIDIA recorded $7.9 billion in revenue from customers headquartered in China, representing about 8% of its total revenue.
Mr. Huang has repeatedly lobbied the U.S. government for greater access to China, and some of his persuasion tactics have been successful. Hwang met repeatedly with President Donald Trump and administration officials last year. The government subsequently lifted restrictions on Nvidia’s H20 chips and allowed exports of the more powerful H200 processor.
Fan has publicly lamented export controls on numerous occasions, calling them a “failure” at a conference last year and saying in May that it was “unwise” for the U.S. and China to build two different AI ecosystems. He also warned that cutting Nvidia out of China’s computing market would allow China to develop its own AI chips to compete with Nvidia internationally.
China is already moving in that direction. Reuters reported last week that about 600,000 H200 chips were waiting in Hong Kong to be shipped to mainland China. The Chinese government is asking AI companies to prioritize purchasing chips from Chinese companies instead.
The idea that Mr. Huang needed some encouragement in the form of attractive women to push for greater access to China seems far-fetched, especially since his lobbying efforts predate his reported meeting at an NVIDIA event in early 2024. After all, Mr. Huang is a salesman trying to control one of the world’s largest AI markets.
Still, the allegations involving Alice Huang open new scrutiny to the company’s business relationships and could undermine Nvidia’s assurances that sensitive technology can be prevented from reaching unauthorized customers.
Rumors of questionable allegiances can be difficult to dispel once they are created. Secretary of State Marco Rubio reportedly warned officials close to President Trump about Hwang’s ties to the spy suspect earlier this year. Even if Nvidia’s investigation finds that Huang did not share secrets with his mistress, the question is whether Nvidia can convince Washington that it can continue to do business responsibly with China.
Nvidia did not respond to a request for comment.
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