NVIDIA CEO Jensen Huang has never concealed his view that the United States should continue to sell AI chips to China, rather than cutting off China's access to this technology. Now, the revelation that he has a relationship with a woman alleged to be a Chinese spy may complicate his stance even further.

The Financial Times reported on Friday that Jensen Huang has a relationship with Alice Huang. The latter was once a senior executive at NVIDIA's client Megaspeed. Jensen Huang has admitted to this extramarital affair and issued a memo of apology to the company on Sunday. American intelligence officials believe that Alice Huang was recruited by Chinese intelligence agencies with the aim of collecting information about this CEO and influencing the company's efforts to relax chip export restrictions.

NVIDIA's independent directors are investigating this matter together with external legal counsel, while the U.S. Congress is already demanding an explanation.

This controversy occurs at a sensitive time for NVIDIA. Historically, China has always been an important market for the company, but in recent years, due to strict U.S. export controls and Beijing's vigorous promotion of domestic alternatives, the size of this market has shrunk. NVIDIA disclosed that within the three months ending July 26, revenue from customers based in China accounted for $7.9 billion, which is about 8% of the company's total revenue.

Jensen Huang has repeatedly lobbied the U.S. government to expand access to China, and some of his persuasion strategies have indeed been successful. Last year, Jensen Huang met with U.S. President Donald Trump and government officials on several occasions; subsequently, the government lifted restrictions on NVIDIA H20 chips and allowed the export of its more powerful H200 processors.

On multiple occasions, Jensen Huang has publicly criticized export controls. Last year, he referred to them as a “fiasco” at a conference, and in May of this year, he stated that it would be “unwise” for the United States and China to establish two different ecosystems. He also warned that if NVIDIA is excluded from China’s computing power market, China will develop its own chips and compete with NVIDIA internationally.

China is already moving in this direction. Reuters reported last week that about 600,000 H200 chips are stranded in Hong Kong, waiting to be shipped to the Chinese mainland. Meanwhile, Beijing is promoting AI companies to give priority to purchasing chips produced by Chinese enterprises.

The claim that Jensen Huang needs to rely on an attractive woman to help him gain access to the Chinese market seems a bit far-fetched, especially considering that his lobbying efforts had already begun long before the two were said to have met at a NVIDIA event in early 2024. After all, Jensen Huang is a salesman trying to dominate one of the world's largest AI markets.

However, the allegations surrounding Alice Huang have also led to new scrutiny of NVIDIA's business relationships by the outside world and may undermine NVIDIA's claims that it can prevent sensitive technology from falling into the hands of unauthorized customers.

Once rumors about suspicious affiliations emerge, it is often difficult to shake them off. Earlier this year, it was reported that U.S. Secretary of State Marco Rubio warned officials around Trump about the relationship between Jensen Huang and the woman who was accused of being a spy. Even though NVIDIA's investigation ultimately determined that Jensen Huang did not disclose any secrets to his lover, the question remains: whether he can still convince Washington that NVIDIA can continue to conduct business with China in a responsible manner.

NVIDIA has not responded to requests for comment.