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By Didi Kirsten Tatlow
Senior Correspondent, International Affairs
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Everyone loves a good spy story, but the truth behind the "Huang Affair" that has scandalized the world is likely far more boring than zipper problems and espionage.
It’s about too-soft U.S. export controls.
The alleged romantic liaison between Jensen Huang, the former boss of the pivotal, American, advanced semiconductor company Nvidia, and China's Alice Huang, the former head of a Singapore-based company who may have received, then diverted to other destinations billions of dollars in coveted Nvidia chips for data centers to help feed China's AI boom, has hogged global attention all week. Reports are emerging of other alleged affairs involving Mr. Huang, but this one seems to be the only one with a national security connection.
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Fetching photos of Ms. Huang, a "Lady in Pink" for her trademark sleeveless, pink designer dress with Mr. Huang in his hallmark black T-shirt and leather jacket at red wine-quaffing evenings in Taipei, massively boosted attention.
Underneath the glamour though, a cold fact: China and the U.S. are in an intense contest over AI, with rival "tech stacks" developing. Chips and data centers are the currency of that contest.
Increasingly, crossing those lines is a career risk, even if business ownership is often very murky and Chinese businessmen are building data centers around the world including in remote Norway, and even if the U.S. AI scene is riven with competing visions, such as, to slow down American AI or not; to regulate or not to regulate; to try or not to reach agreement with China on AI safety, and how to do it in a way that won't be broken?
The Concerns
As with anything that reaches such teetering, scandalous proportions, a lot came together over the Huang(s) Affair.
Such as, concrete concerns in political and security circles in the U.S. that softening export controls under Trump.
The story started slowly last year, as the Singapore authorities investigated Ms. Huang's former company, Megaspeed, over alleged financial improprieties. No one answered the telephone or emails sent to its Singapore address. The company has denied wrongdoing.
U.S. intelligence officials were also reportedly looking at Ms. Huang but mostly for other reasons—her apparent closeness to Mr. Huang.
Yet it all only gained traction around the recently-concluded midterm elections, with President Donald Trump roundly defeated and the Democratic Party winning both houses of Congress. A power shift was underway in D.C.
Export controls that had been put in place under the previous administration of President Joe Biden had been relaxed last year under Trump's Department of Commerce head Howard Lutnick and his Bureau of Industry and Security head Jeffrey Kessler. Mr. Huang and other Nvidia executives had aggressively lobbied Trump and others in D.C. to soften or drop the controls.
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A lot of people, including in the U.S. national security establishment, were irate about the softening.
In their view, China was not supposed to be getting advanced chips from America.
China is working very hard to catch up with U.S. chips and has made real progress. It's a national priority.
But it has also long extracted top technology from the U.S. and other advanced economies like the Netherlands, including AI research and kit, as Newsweek and other reporting, Western intelligence agencies and independent book publications have shown.
Complicating the picture, the Communist Party may not care about chip exports as much as people think. Hundreds of thousands of semiconductors are languishing in Hong Kong, unable to enter the mainland of China. The CCP doesn't want to be dependent on external supply chains. It wants to deepen innovation at home.
More Chip Controls
Mr. Huang, who left his job as Nvidia CEO on Thursday, has not admitted to having an affair with Ms. Huang (they are not related), though he has admitted to having an affair and reports of more extramarital liaisons keep coming.
But the affairs were never the point. The export controls, which are national security concerns, were.
One strong, public indication of that came on Thursday from the China Select Committee in Congress. It is a bipartisan committee whose job is to scrutinize U.S.-China relations. It does so with a very critical eye.
"Jensen Huang’s firing from the company he founded is an unfortunate end that could have been avoided," the committee chairman, Republican John Moolenaar, said in a statement.
"It is in our national interest for NVIDIA and our other AI champions to succeed, but American companies should never jeopardize our nation’s security by giving Chinese companies access to their most advanced chips," Moolenaar said.
"Nvidia must now change its corporate practices and appoint leadership that makes national security its top priority," Moolenaar continued. And here’s the main part: "In Congress we must act quickly to pass bipartisan export control legislation in the year-end national defense bill."
There you kind of have it. More export control legislation please. Stop letting out of the country the exquisite technology that the U.S. doesn't want its adversaries getting. There’s no demand problem for the chips; sell them elsewhere.
AI Is Spy Stuff, in China
For now, perhaps even for a long time or even forever, Ms. Huang, 42, once a tech socialite and businesswoman around Asia, has disappeared from public view. Who or what she is exactly remains unanswered.
But espionage concerns are real. China's Ministry of State Security is at the forefront of China's AI, as its head, Chen Yixin, has written and Newsweek has reported.
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Megaspeed, the company that she helped found and led for some months in 2023, made a lot of money unusually fast.
In 2024, its total assets surged 90-fold to US$2.98 billion from US$32.9 million in 2023, according to Singaporean company records quoted by the South China Morning Post.
Its assets were valued at just US$75 in 2022, according to the media in Hong Kong, where Ms. Huang had studied and had residency. Revenue rose from almost zero in 2023 to US$ 294 million in 2024, the SCMP said.
On Thursday, Megaspeed director Tan Yong Pong said in a statement that the firm welcomed "appropriate government scrutiny" and was "ready to cooperate fully" with U.S. investigations.
"Megaspeed takes its compliance obligations under U.S. export control laws extremely seriously," said Tan.
Mr. Huang has said that he prioritizes U.S. national security: "I love our country and our company. I am committed to protecting NVIDIA and supporting America’s national security. I am proud and grateful to be an American," he said in a statement.
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