A new study claims that a leading open-source model developed by a Chinese company was trained on NVIDIA chips, which are subject to export restrictions by the U.S. government and cannot be shipped to China, China's largest geopolitical rival.

It is alleged that China's leading laboratories have extensive exposure to Blackwell GPU, which highlights the severity of the problems faced by this prominent chip design company. NVIDIA CEO Jensen Huang left the company this week, after admitting to having an extramarital affair with Alice Huang, a senior executive from Megaspeed; Megaspeed is accused of being involved in smuggling NVIDIA chips to China. Alice Huang is also alleged to be an agent for Chinese intelligence agencies.

Although the relationship between Jensen Huang, a client, and two employees has received the most public attention, the potential corporate liability NVIDIA may face for violating export controls clearly also prompted the company to decide to go their separate ways from Jensen Huang.

U.S. export controls are intended to protect the United States' leading position in artificial intelligence capabilities relative to China, but Jensen Huang has long been trying to open up this market. Blackwell GPU is prohibited from being exported to China or Chinese-controlled companies, while the Trump administration allowed NVIDIA to export less powerful H200, on the condition that the shipments had to take a detour so that the U.S. could impose a 25% tariff.

The person in charge of the non-profit research organization Unemployment Labs, and a former researcher at OpenAI named Will DePue, analyzed the large language model weights publicly released by DeepSeek, Moon's Dark Side, MiniMax, and Ant Group – that is, the unique structure of these models. Model weights still reflect the configuration of the chips used during training. DePue discovered compelling evidence indicating that the most highly regarded models, including the Kimi K3 version of Moon's Dark Side and the V4 model from DeepSeek, all bear traces of being trained on Blackwell chips.

White House technology advisor Michael Kratsios previously stated this year that "The Dark Side of the Moon" used NVIDIA chips subject to export bans, citing American intelligence sources. Non-profit research institution Epoch AI estimates that in 2024 and 2025, approximately 2 million advanced chips entered China through schemes designed to conceal their final destination.

However, this does not necessarily mean that these models were trained entirely on NVIDIA chips, nor does it necessarily imply a violation of export control laws; these chips may also be located in overseas data centers, which has become a common method for Chinese companies to obtain computing power and has spurred an industrial revolution in Malaysia. According to Epoch, it is estimated that 275,000 NVIDIA AI accelerators were imported into Malaysia in 2024 and 2025.

However, the apparent goal of the export ban is to prevent Chinese AI laboratories from using the most powerful chips for training. For a long time, the hawks towards China have been calling for stricter control over chip users, rather than just restricting the owners or installation locations of the chips.

A researcher at the Center for Security and Emerging Technologies at Georgetown University, Sam Bresnick, said this summer to TechCrunch: “If we care about America’s technological advantage, then I don’t understand why you don’t allow Chinese companies to engage in chip production on the Chinese mainland, in Hong Kong, and in Macau, yet at the same time you say that if they go to Malaysia, they can do whatever they want.”

Megaspeed, led by Alice Huang, has been at the center of such trade through its subsidiary Speedmatrix for many years and has been under investigation by the governments of the United States and Singapore. On Friday, Bloomberg also reported that a company associated with Alice Huang was involved in smuggling banned NVIDIA chips to a data center in Shanghai.

In May this year, the bearish research firm Culper released a report stating that NVIDIA faced a "China problem" because a significant portion of its revenue came from Chinese demand, which was either met through remote data centers or through smuggling that violated U.S. laws. The report detailed the relationship between Megaspeed and NVIDIA, and alleged that a company under Alice Huang received support from Chinese enterprises that were prohibited from accessing U.S. chips.

Ironically, the short-selling institution Culper placed bets against NVIDIA not based on an expectation that the US government would take action. Instead, their focus was on the Chinese government's response to these bans – namely, its renewed commitment to developing the domestic chip industry.

If China succeeds, the billions of dollars in demand for NVIDIA chips from China could disappear. It is reported that about 600,000 H200 chips have been stockpiled in Hong Kong, waiting to be shipped to China. Although Chinese companies may want these chips, there is no consensus among outsiders as to why they have not yet been permitted to import them.

A researcher at Stanford University who specializes in Sino-US technology policy, Graham Webster, stated that he does not believe holding back these chips will promote domestic production, as the demand for chips is simply too high. Other reasons cited for the delay in release include: preparing for a possible trade agreement that could involve the import of a large amount of American goods; or concerns that there may be surveillance technology embedded in the chips.

Currently, U.S. companies have limited obligations regarding how to handle controlled products such as AI chips for their customers. However, if government investigators confirm that there is indeed chip smuggling and Jensen Huang was aware of it, then his personal and professional involvement with Alice Huang could pose even greater problems for NVIDIA. Both NVIDIA and Jensen Huang have endorsed the data centers of Megaspeed, claiming that NVIDIA employees have visited to verify that these data centers are legal.

The U.S. government's handling of NVIDIA and Megaspeed is also under scrutiny. Howard Lutnick, the Secretary of Commerce responsible for chip export licensing, is reportedly likely to lose his position due to reports that investigators under his command failed to identify suspicious chip buyers and because he was too close to NVIDIA executives.