Nvidia's Megaspeed ties show potential blind spots in the U.S. effort to block China from accessing advanced chips

By Steve Goldstein and Britney Nguyen

Nvidia CEO Jensen Huang's business meetings are routine practice and existing U.S. export controls largely miss the cloud, experts say

Nvidia CEO Jensen Huang was reportedly close to an executive under U.S. surveillance for potentially being a Chinese intelligence asset, according to the New York Times.

If there's one issue that continues to cloud over Nvidia, it's how the company's chips continue to end up in China's hands despite a years-long effort by the U.S. to stop that.

A New York Times story published Thursday - alleging that U.S. authorities were concerned about a Chinese spy plot targeting Nvidia (NVDA) CEO Jensen Huang - has brought that issue to the limelight once again. The report said U.S. intelligence was surveilling Alice Huang, or Huang Le, for being a Chinese intelligence asset while she led Megaspeed, a Singaporean cloud-computing company. For several months, Megaspeed has been the subject of published reports about alleged contravention of U.S. export controls involving the highest-powered Nvidia chips.

An Nvidia spokesperson said in a statement shared with MarketWatch that the Singaporean cloud provider "has been no different than many other regional cloud customers," and that the interactions between the executives "are not unusual or unexpected."

"Our regional cloud customers receive ordinary business information - not sensitive Nvidia trade secrets - and zero information relevant to national security," the spokesperson said. "The diversion allegations against this regional cloud were thoroughly investigated and debunked last year."

Nvidia this year changed its geographic revenue reporting methodology. Previously, Singapore was one of Nvidia's top destinations, but now Nvidia reports geographic revenue based on the direct customer headquarters rather than the customer billing locations.

Sen. Elizabeth Warren - a Massachusetts Democrat who has been critical of the Trump administration's approach of allowing Nvidia to sell previous generations of its advanced chips to China in exchange for a cut of the profit - said Huang and Nvidia's board of directors "owe Congress answers" over the findings of this week's New York Times investigation.

Warren added in her statement that Congress needs to pass legislation supported by both parties that addresses the movement of advanced U.S.-made technology into China.

However, there's no evidence so far that Huang intentionally passed sensitive information to China, said Lizzi Lee, a fellow on the Chinese economy at Asia Society Policy Institute.

A meeting between a CEO and a major customer is routine business practice, Lee told MarketWatch, and that's "precisely what makes these intelligence operations so difficult." She added that it's not clear what type of information was being sought in any meetings, which included drinks and a business dinner, according to the New York Times.

Nvidia at 'the center of a geopolitical rivalry over the future of technology'

While the U.S. has strong tools against the diversion of chips and other advanced technologies to China and other countries it deems as adversaries, it wields less power over relationships, such as the one described between the executives, Cheng-chi Chang, a research scholar at New York University School of Law's U.S.-Asia Law Institute, told MarketWatch.

For Nvidia, the larger risk is around policy, he noted in emailed comments. Megaspeed has reportedly continued buying Nvidia products this year, sometimes using intermediaries, and Chang said those purchases will likely invite questions over how the chip maker is vetting customers.

"Nvidia needs the U.S. government to trust that vetting, both for its business with Southeast Asian data centers that rent computing power to Chinese companies, and for any future sales to China," Chang said.

Neither Megaspeed nor the U.S. Commerce Department's Bureau of Industry and Security, which oversees export controls, immediately responded to MarketWatch's requests for comment.

Nvidia CEO Huang told Bloomberg Thursday that the company verified that Megaspeed hasn't sent its artificial-intelligence chips to China, which would violate U.S. trade restrictions. He added that Alice Huang is not at Megaspeed anymore.

More broadly, the situation shows issues with U.S. export controls on chips, according to Lee, given that China doesn't necessarily need Nvidia's physical chips to access their immense computing power.

Chinese companies can obtain Nvidia's compute capacity through data centers in Southeast Asia through legal commercial arrangements - and because these business relationships and the chip supply chain are increasingly complex, "enforcement becomes much harder than monitoring what crosses China's borders," Lee said.

Chang noted that current U.S. rules around advanced chip exports "largely do not reach computing power rented over the cloud." They also don't address potential influences that are gained through business relationships, he added.

For now, there's no evidence that Nvidia did anything wrong, Lee said, but it will have to work through the political and reputational challenges that arise from the report.

"Jensen Huang has become enormously influential in shaping U.S. chip policy, and Nvidia's commercial interests are intertwined with Washington's China strategy in complex and sometimes conflicting ways," Lee said.

Sam Bresnick, a research fellow at the Center for Security and Emerging Technology, a think tank, also noted the deepening relationship between Huang and the Trump administration as a reason why the Nvidia CEO would be the target of a potential intelligence operation.

Huang could be beneficial to an intelligence official keen on getting a sense of Trump's thinking on U.S. strategy as it relates to chips, according to Bresnick. "His company is at the center of a geopolitical rivalry over the future of technology," he said.

During Trump's second term in office, Huang and other chip executives have urged the White House to allow them to sell graphics processing units to Chinese customers - often arguing that restricting them would push China to become more self-reliant and lead to a wider divide between the technology rivals.

Going forward, Lee expects the complex relationship between national security and business to remain a long-term issue for the tech industry beyond Nvidia.

Earlier this year, federal prosecutors charged a co-founder of server maker Super Micro Computer (SMCI), as well as two other individuals with ties to the company, with conspiring to bring restricted Nvidia chips into China. The U.S. Justice Department never alleged that Nvidia was involved in that maneuver, while Super Micro co-founder Wally Liaw has pleaded not guilty.

The U.S. will have to figure out the balance between preserving its tech lead and doing business with China, which in turn drives profits to companies that are essential to fund innovation, Lee said.

-Steve Goldstein -Britney Nguyen

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10-31-26 0830ET