China is the big winner from the Nvidia debacle
China is the big winner from the Nvidia debacle
Charles PartonSat, November 14, 2026 at 2:00 PM UTC
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Jensen Huang attending a state banquet for Donald Trump and Xi Jinping in Beijing on May 14, 2026
Commentators talk about “the AI race” between America and China. It is an inadequate metaphor. A race presupposes a predesignated finishing line.
But unlike the “space race” between the United States and the Soviet Union to be the first to put a man on the moon, with AI there will be an everlasting struggle to dominate. Chinese leaders talk about “the high-tech field being the main battlefield of international competition”. The Jensen Huang debacle has advanced their cause.
Xi Jinping likes the phrase “win-win”, but in this case it might be “win-win-win”. Firstly, there are the benefits from Jensen Huang’s relationship with the Chinese mainland businesswoman Alice Huang with whom he shared a surname and a bed. Next are big questions over America’s multiple failures to implement its own laws to protect its technological lead. And finally, Jensen Huang’s departure from Nvidia will disrupt and hamper US tech advances.
It is always good to start with a lurid spy story, perhaps leaked deliberately by those who oppose Huang’s advocacy of more sales of chips to China and the Trump administration’s willingness to follow along. The truth of the alleged involvement of China’s ministry of state security (MSS) may be more prosaic than a carefully planned “honeytrap”.
Jensen Huang photographed with Alice Huang in Taiwan - NowNews
Much is conjecture, and Todd Blanche, the US Attorney General, stressed this week that investigators have reached no conclusion on whether Alice Huang was acting as a Chinese spy – an allegation Beijing has dismissed as a “smear” and which Jensen Huang has denied knowing anything about.
Yet if the suspected connections with the MSS are true, the likelihood is that Alice Huang was combining business, pleasure and patriotism. Most men having affairs will try to please their inamorata, who perhaps in this case was more thrilled with a bunch of chips than a bunch of roses. US and Asian authorities have been investigating whether Megaspeed diverted restricted high-end Nvidia chips to China – allegations that remain unproven and which Nvidia has dismissed insisting it complies fully with US export laws.
At which point, enter the MSS. The Chinese surveillance panopticon will have noted the relationship with a key opposition warrior in the technology battlefield, one with direct access to the other side’s commander-in-chief. From Alice Huang’s point of view, cooperation with the MSS would have given her powerful protection and backing in the world of China business.
For the MSS, her value would have been fourfold: potentially getting hold of restricted chips; encouraging Jensen Huang in his bids to loosen American sanctions on hi-tech; picking up snippets of political and other intelligence via someone with direct access to the centres of power in the United States; and getting some idea of the future plans of Nvidia and other tech companies.
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It is unlikely that pillow talk included the breakdown of Nvidia’s latest chip development. The MSS would certainly attempt to get access to his devices, but one can only hope that Jensen Huang had listened to advice to take a burner phone and a computer containing nothing sensitive when visiting China.
It is not all “win-win-win” for the CCP if the Huang affair leads to a tighter implementation of laws to restrict high-level chips going to China. Jensen Huang can no longer play the role of staunch advocate for more open sales. The risk exists that reinforced measures could upset the ugly named “constructive relationship of strategic stability”, to the advantage of neither China nor the US.
But political turmoil and division in Washington will always have an upside for Beijing. The affair may have further exacerbated poor relations between China hawks and doves in the US. Many would include Howard Lutnick in the latter category. The US commerce secretary, whose department has oversight of chip exports and has been missing in action over the past years. A consistent policy on China is unlikely in the febrile atmosphere of blame, raging through congress.
But the biggest win for China may turn out to be the doleful effects of Jensen Huang’s fall. His talent and drive in building the world’s most valuable company will be hard to replace. In an echo of Xi Jinping’s own predicament back in the world of Chinese politics, there seems to have been no succession plan. Will Nvidia’s cutting edge remain so sharp?
As worrisome is the role which Nvidia plays in financing hi-tech start-ups. Nvidia has acted almost as a venture bank, to the tune of well over $100bn (£80bn). If the company stumbles, others might not get out of the starting blocks. If that slows American progress in the AI and tech competition, China benefits.
It is surely the most expensive extramarital affair, or pair of affairs, in history. North of $500bn has been wiped off the value of Nvidia shares. Jensen Huang must personally have lost more than $15bn.
For China, it will also have reinforced the wisdom of Xi Jinping’s insistence on security and development as the two wheels of progress – and his insistence that CCP officials exercise self-governance and self-restraint.
Charlie Parton spent 22 years of his 37-year diplomatic career working in or on China, Hong Kong and Taiwan. In his final posting he was seconded to the EU Delegation in Beijing
Source: “AOL Money”
