Ina Fried

Good for Nvidia’s board for doing an investigation. But Jensen’s behavior is only half the story. The biggest problem remains unaddressed: the Department of Commerce has enacted policies—at the encouragement of Jensen, and which the MSS reportedly sought as well—that allow China to continue to access the most advanced Nvidia chips, including via Megaspeed. @CommerceGov leadership knew that Jensen was sleeping with a Chinese spy and that Megaspeed was a Chinese cutout, but still actively opposed any policies to tighten export controls on Nvidia chips. Why? Commerce could have blocked chip shipments to Megaspeed the moment it found out that it was run by a Chinese spy, but it did not. Commerce has also refused to enforce regulations—which ironically remain on the books—that would require exporters to apply for a license to ship large numbers of AI chips to untrusted entities in many countries, which would prevent China from using shell companies like Megaspeed to buy controlled chips. And Commerce has done nothing to cut off China’s remote access of controlled chips, or its ability to buy controlled chips in the United States. Why is Commerce protecting Jensen and supporting his preferred policies even though it has known for months that Jensen was sleeping with a Chinese spy? Why is it STILL doing so? Obviously Nvidia needs to take significant steps in its operations, security, and policy advocacy to ensure it takes national security concerns more seriously. But it is even more important that the Department of Commerce tighten up export controls to prevent things like this from ever happening again. It is utterly baffling that despite being privy to this information for months, they have not taken even the most basic actions to protect the country, such as cutting off a company that is literally run by Chinese spies from buying AI chips. By the way, as of this writing, Nvidia STILL lists Megaspeed as a “regional cloud partner” on its website.

The story keeps getting crazier. To recap everything that has been reported so far: - The US intelligence community discovered that Jensen Huang, the CEO of the largest company in the world, was sleeping with Alice Huang, a Chinese spy and an executive at Megaspeed. (FT) - Multiple independent investigations have concluded that Megaspeed is likely a Chinese cutout, which helps Chinese companies access AI chips or circumvent export controls. (NYT and Bloomberg) - The US intelligence community also concluded that Alice Huang’s goal was to convince Jensen to lobby the U.S. government to loosen export controls on advanced AI chips. (NYT) - The intelligence community relayed this information to “a small group of top US government officials” earlier this year. (FT) - Over the last year, Jensen Huang has repeatedly lobbied the U.S. government to loosen export controls on advanced chips. @BISgov has done so, not only by permitting the export of H200 chips to China, but also not enforcing export controls that would have required a license for exports of the most advanced Blackwell chips to Megaspeed and Southeast Asia. - Although @CommerceGov leadership was presumably briefed on this information by the U.S. intelligence community, @BISgov has taken no actions to tighten controls on Megaspeed or Southeast Asia. - Megaspeed remains a preferred cloud partner of Nvidia, and continues to receive Nvidia Blackwell chips despite employing a Chinese spy who reportedly is romantically engaged with the CEO of Nvidia. - Tens of billions of dollars worth of AI chips have been exported to Southeast Asia this year alone, and Malaysia and Singapore are now two of the four largest importers of AI chips in the world. What is going on here??? We need answers. The question of who gets the most advanced AI chips in the world is literally the defining strategic question of our time. And not only does it seem like the MSS may be directly influencing the debate on export controls in the United States, but also @CommerceGov is refusing to listen to the warnings of the IC on this issue. What is a POSSIBLE good explanation for why Megaspeed is still receiving chips? Why is there not a license requirement for AI chip shipments to all of Southeast Asia? This is beyond strange at this point. The fallout from this story will be massive. Obviously, the motivations underpinning Nvidia’s policy views opposing export controls must now all be questioned. But also, how did @BISgov sit on this information and has still taken no actions? We need answers.