Huang affair allegations sharpen scrutiny of Nvidia’s China strategy

The Financial Times reported the relationship on Friday. Jensen Huang acknowledged the affair and apologized in a company memo on Sunday. Nvidia’s independent directors, with outside legal counsel, are investigating, while members of Congress are demanding answers. Nvidia did not respond to a request for comment.

China has historically been a major market for Nvidia, though U.S. export controls and Beijing’s push for domestic alternatives have reduced its importance. In the three months ended July 26, Nvidia recorded $7.9 billion in revenue from customers headquartered in China, about 8% of its total revenue.

Huang has repeatedly urged Washington to expand access to China. He met several times with President Donald Trump and administration officials last year; the government later reversed restrictions on Nvidia’s H20 chips and permitted exports of its more powerful H200 processors. Huang has called export controls a “failure” and said in May it was “not wise” for the United States and China to develop separate AI ecosystems. He has also argued that excluding Nvidia from China’s computing market could help local companies build chips that compete with Nvidia internationally.

China is pursuing domestic alternatives. Reuters reported last week that about 600,000 H200 chips were being held in Hong Kong awaiting shipment to mainland China, while Beijing is urging AI companies to prioritize Chinese-made chips.

The report says U.S. intelligence officials believe Alice Huang was recruited to gather information about Jensen Huang and influence Nvidia’s efforts to ease export restrictions. But his lobbying for broader access predates their reported meeting at an Nvidia event in early 2024. The allegations nevertheless raise questions about Nvidia’s business relationships and its ability to keep sensitive technology from unauthorized customers. Secretary of State Marco Rubio reportedly warned Trump allies about the relationship earlier this year. Even if the investigation finds no sharing of secrets, Nvidia may face a harder task persuading Washington that it can do business with China responsibly.