In recent months, the tide of expert opinion about semiconductor export controls has been shifting. There is growing skepticism about their effectiveness and impact on national security. Export controls seem to have strengthened China’s commitment to self-reliance and import substitution policies. US attempts to leverage “chokepoints” on compute do not really work without dragging ever-expanding parts of the supply chain into the controls – materials, chemicals, minerals, cloud services. Studies have begun to document the serious damage to U.S. leadership in the semiconductor, cloud and AI industries caused by cutting off our companies from the Chinese market.
One must put the sudden “reveal” of Huang’s affair with a Chinese businesswoman in this context. The timing is no accident. It was triggered by U.S. government tips given to the media. It’s Kompromat.
Jensen Huang may or may not be a target of a Chinese intelligence operation. But he is definitely a target of a U.S. intelligence operation. By forging a spurious link between the affair and export controls, the operation portrays Jensen Huang as a dupe of the PRC’s Ministry of State Security, threatens his position at the firm, and discredits his opposition to export controls. He’s only against export controls because of the seductress, you see.
The hit job was a success, shoring up the flagging case for export controls. “Jensen Huang Affair Revives Push for Chip Restrictions on Capitol Hill,” writes the Wall Street Journal. Despite the evidence that tighter restrictions cause exactly the kind of arbitrage that Alice Huang’s company Megaspeed was involved in, China hawks in Congress are using the affair to promote even tighter restrictions on chip exports.
But what does the affair have to do with the success or failure of export controls? Answer: absolutely nothing, other than grabbing attention. Let’s look at the facts.
- October 2022. U.S. Commerce Department, under the Biden administration, imposed restrictions on high end chips.
- March 2023. A Singapore-based firm rebranded as Megaspeed entered the data center market, with Alibaba as its anchor client. (Alice) Huang Le became the company’s managing director and controlling shareholder as ownership of the entity was transferred to Huang Le Limited, a holding company carrying her name. The plan seems to have been to arbitrage export controls on advanced chips by siting its data centers outside mainland China and allowing Alibaba to access them via the cloud.
- May 2023. Jensen Huang publicly criticizes the export restrictions as counterproductive. There is no evidence that he had even met Alice Huang at this time.
- June 2023, Jensen Huang joined the CEOs of Intel and AMD to directly lobby the Biden administration against tightening the rules further. None of the three CEOs were involved in affairs with Chinese mata haris at that time.
- October 2023: The Biden administration disregarded their advice and tightened the controls further.
- November 2023: Megaspeed’s ownership was transferred to Swiftdata and Huang Le formally resigned as a director, but this was done to obscure the underlying beneficial interests while replacing her name on public director registries.
- June 2024 – February 2026. Megaspeed purchased at least $4.8 billion worth of high-end AI equipment and server infrastructure, including Nvidia H100 and GB200 systems, to build data centers across Southeast Asia. The purchases were legal as such, but some U.S. officials wanted to know whether the chips were being transshipped into China.
- Late 2024 – mid 2025. The Commerce Department’s Bureau of Industry and Security (BIS) initiates an investigation of Megaspeed. BIS conducted on-site inspections and supply chain audits across Southeast Asian data centers to verify serial numbers and end-user declarations. First images of Jensen and Alice Huang Le together appear in this time frame.
- Late 2025: The Department of Justice requested that BIS suspend its civil/administrative investigation into Megaspeed. BIS transfers the case files to the Department of Justice to lead a federal criminal inquiry into Megaspeed’s procurement networks.
- October 2026. DoJ planted the spy plot story with the New York Times. The Times published a story “Nvidia Chief Seen as Target of Chinese Spy Plot.” No investigative evidence has been made public.
So, a wealthy, middle-aged businessman had an affair with a middle aged Chinese businesswoman who was at some point a major customer of his company and likely involved in arbitraging export controls. We fail to see how this vindicates export controls or provides evidence for tightening them.
Indeed, bypassing the export controls is directly against Chinese state policy. When the Trump administration offered to relax its controls on (degraded) Nvidia chips, the Ministry of Information Industries and the Cyberspace Administration of China is said to have told its companies not to buy them. ByteDance, Tencent, Alibaba and other major tech firms were urged to prioritize domestic alternatives. Nvidia’s export-compliant chips (like the H20) had scaled-back compute performance to meet U.S. Commerce Department caps. Chinese tech executives noted that the performance-to-cost ratio made domestic chips increasingly competitive for training and inference workloads.
Export controls weren’t working. And the reason was exactly what Jensen Huang told us it would be. If China buys Nvidia chips they become more dependent on technology, standards, and firms that are American. So one might see Miss Huang Le not as a honey pot for Chinese intelligence, but as a channel through which both American export controls and Chinese import controls are bypassed.
In other words, this is not a story about a Jensen Huang affair, it is a story about market forces bypassing political controls and trade barriers set up by both the U.S. and China.
Jensen Huang has advocated the open sale of his chips to the global market ever since export controls were imposed. So obviously his position is not a product of his girlfriend. There may be some honey involved for Mr. Hwang, of course, but it is not a honey pot operation. Those who assert that Chinese intelligence made Ms Huang an “asset,” creating a “national security nightmare,” admit that this happened after the major sales of chips to Megaspeed and after she was already involved with Jensen, so there goes the “spy plot” angle. The New York Times article says that Ms. Huang is “suspected” of being linked to the Ministry of State Security. But what is the evidence for this link? There is none yet. China’s official national security policy is to not rely on Nvidia chips; why would its “asset” be up to her ears in the rental or sale of Nvidia chips?.
Everything we know about Huang Le’s story is that she is an entrepreneur who was essentially making a pile of money by arbitraging the controls on Jensen‘s chips. The main customer of Megaspeed seems to have been Alibaba. U.S. export controls create arbitrage opportunities, as do all artificial trade barriers. Tighter controls will intensify those opportunities. Whether Jensen is having an affair with Huang Le is really beside the point. Unless the point is not national security, but discrediting an opponent of export controls.
