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By John Feng
China Editor
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If Jensen Huang has been caught with his pants down with a Chinese spy, that’s only convenient for his political enemies in America, according to skeptics in Washington—and in Beijing.
This week, the Communist Party’s propaganda arm has indirectly leaped to the defense of Nvidia’s chief executive: first by denying that his alleged mistress was an intelligence asset; then by claiming China had little to gain from a scandal that could rock the AI landscape in the United States for years to come.
China’s Foreign Ministry said on Tuesday that those looking for links to espionage were "chasing shadows," after a state-owned news outlet painted Huang as the victim of a domestic U.S. smear campaign timed to explode after the midterm elections.
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"At a time when hard-won momentum toward detente is emerging between China and the U.S., and both sides have a shared interest in managing their differences and stabilizing bilateral relations, why has the ‘Chinese spy’ rumor suddenly surfaced at this very moment?" read an editorial by the Global Times newspaper.
Another piece by the same paper speculated that AI-cautious Democrats wanted to use the scandal to slow down the industry.
"Jensen Huang has been singled out and targeted—a political sacrificial lamb in the bitter infighting between America’s two major parties. It is entirely an American stunt, having absolutely nothing to do with China," said Hu Xijin, the former longtime editor of the nationalistic tabloid.
The theory follows a similar debate in America, about whether Huang’s scandal is a sexual one—albeit with serious violations of business ethics—or an espionage case worthy of national concern.
Part of the argument rests on the fact that Huang’s relationship with a woman named Alice, a former executive at Nvidia’s biggest client in Southeast Asia, Megaspeed, was known or suspected for at least a year, thanks in part to his being the most photographed man in town wherever he goes.
Serious people in Washington, D.C., believe the damning front pages—appearing amid a major defeat for the GOP in the midterms—might have been a calculated move by hawks in the U.S. government against a newly weakened Donald Trump, to the benefit of restrictionists in favor of cutting China’s access to American technology.
Huang was caught in "a vicious business battle," said Marko Jukic, a senior analyst at the consulting firm Bismarck Analysis, "because, in many ways, Nvidia's strategy for the future of AI and the frontier labs' strategies for the future of AI are diametrically opposed, with both trying to maintain something of a monopoly on their layer as leverage over the whole industry."
The Nvidia boss is known to have Trump’s ear on tech and convinced the U.S. president to lower the barriers to export his company’s powerful H200 chips to compute-hungry AI labs in China. He argued the Chinese AI industry would stay a generation behind, and the country’s tech ecosystem would be reliant on U.S.-supplied hardware.
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Huang is a rare type of global tech superstar who has found a popular following in the U.S., China and Taiwan, where his company’s most-advanced chips are made, but he may have overestimated Beijing’s willingness to play his game.
In the 10 months since Nvidia’s H200 graphics processors were cleared for sale to China, Chinese companies have purchased tens of thousands of them, but the Chinese government has withheld large-volume imports—over half-a-billion units are idling in Hong Kong, awaiting release by the authorities, according to Reuters.
Chinese labs want—and need—the chips, which are foundational to developing advanced AI, but President Xi Jinping sees strategic vulnerabilities in relying on foreign tech in a sector he considers vital to China’s long-term economic prosperity.
A Global Times op-ed last week pushed back on the notion that China would accept a U.S. chip business plan designed to "preserve a stable technological gap between the two countries."
"They apparently assumed that a slight loosening of restrictions would trigger a buying spree in China. But the Chinese market today is no longer at a stage where it must buy whatever the U.S. decides to make available…. Any attempt to use export controls to lock other countries out of technological progress will ultimately come back to haunt those imposing the restrictions," the Communist Party newspaper said.
It’s unclear that even the U.S. intelligence community knows for certain whether Alice, who had a previous career in Chinese television and investment banking, was trained or recruited by China’s Ministry of State Security.
The MSS has a spy school in the Chinese capital, known as the University of International Relations, but Beijing also has a history of co-opting or coercing well-placed Chinese nationals to do its bidding overseas.
Trump told reporters at the White House on Monday he was "amazed" at the allegations against Huang, who he considered "a very high-quality person."
"He said he had absolutely no idea that the person in question was a spy," Trump said of his call with Huang earlier the same day.
He also said the FBI was now looking into the case, without elaborating.
Huang may find it hard to escape the position he put himself in, with Alice and with Megaspeed, a Singapore-based cloud computing company that purchased $4.6 billion worth of Nvidia equipment from 2022 to 2025, according to the Center for Advanced Defense Studies.
A C4ADS report published in September tied Megaspeed to a web of shell companies transshipping blacklisted Nvidia chips to China in violation of U.S. law.
Nvidia and Megaspeed didn’t respond to separate requests for comment.
"For Huang, the incident is probably fatal to his career. For chip technology, any damage is probably minimal. The real issue is why the U.S. continues to put up with aggressive espionage by a hostile foreign power. In this case, there has not even been a public rebuke," said James Lewis, a senior adviser with the Center for Strategic and International Studies.
"China is a hostile, aggressive power and while the U.S. needs to find a modus vivendi with it, this should not include untrammeled economic espionage," Lewis wrote on his Substack newsletter, Notes for Future Historians.
If Huang is the victim, then the perpetrator is still at large.
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