Shareholders Sue Nvidia Over Jensen Huang Affair | China in Focus

Welcome to China In Focus. I'm Tiffany Meyer. Our top story, an FBI investigation and a shareholder lawsuit. It goes far beyond an affair with a Chinese businesswoman. NVIDIA and Jensen Huang remain in the headlines. We bring you the latest. Secretary of War Pete Hegseth ordering sweeping overhaul of U.S. military education, the refocus, prioritizing skills essential for victory in war instead of academic theories, billions in investments pouring into America, foreign automakers establishing or moving production lines in response to tariffs imposed by the Trump administration. Japan in action, deepening ties with the U.S. to counter China's military threats in the Indo-Pacific region and work with Vietnam together to secure a supply of rare earths. NVIDIA and its CEO, Jensen Huang, continue to pop up in headlines. The Rosen Law Firm is suing NVIDIA and Huang on behalf of NVIDIA's shareholders. In a proposed class action complaint filed in San Jose, California, the law firm accuses NVIDIA of misleading shareholders about Jensen Huang's affair with an alleged Chinese spy. Last month, the New York Times reported that U.S. intelligence flagged a Chinese spy plot targeting Jensen Huang through Alice Huang, the former managing director of the Singapore-based data center company Megaspeed. Jensen Huang initially responded to the story by calling his meetings with Megaspeed normal and not unusual. But after lawmakers demanded that Jensen Huang attend a joint closed-door briefing concerning his ties to Alice Huang, and after reports came out that U.S. intelligence believed Jensen and Alice Huang's relationship was romantic in nature, Jensen Huang admitted publicly that he had an affair with the Megaspeed executive. For context, Megaspeed was created in 2023, right around the time when various tech companies across Southeast Asia started popping up and providing computing power services to China-based companies. That was shortly after the Biden administration began restricting advanced chip exports to China in 2022. It was in 2024 when Alice Huang was first publicly spotted with Jensen Huang. 2024 was also around the time U.S. investigators began looking to determine whether Megaspeed and its sister company in Malaysia, Speed Matrix, were smuggling NVIDIA chips to China. Megaspeed has funneled NVIDIA chips to data centers in Malaysia and Indonesia, possibly to remotely serve China-based customers. Within such a short period of time, Megaspeed became the largest Southeast Asian buyer of NVIDIA chips. Is Alice Huang a Chinese spy or simply a Chinese businesswoman who wants to sell chips and happen to get caught up in an affair? U.S. intelligence came to the conclusion that Alice Huang was recruited by China's Ministry of State Security, China's top intelligence apparatus. It also recruited the famed Chinese spy Christine Fang, who managed to get into a romantic relationship with U.S. Representative Eric Swalwell. Given Nvidia's pivotal role in the global AI race, its leadership could be of significant interest to the Chinese Communist Party. And personal relationships like that with Alice Huang could create opportunities for both intel gathering and even blackmail. For years, Jensen Huang has pushed hard to get more NVIDIA chips into the Chinese market and criticized U.S. export controls, arguing that U.S. restrictions on AI chips going into China would make China more powerful. In a China Talk podcast, adjunct fellow at the Center for a New American Security, Jordan Schneider, made the point that Having affairs with your Chinese clients who have connections to foreign intelligence is indicative of Jensen Huang never really internalizing just how important his chips are to the global balance of power. Senior fellow at the Council on Foreign Relations, Chris McGuire, warned that investigations involving Megaspeed show that the U.S. government needs to do better with the way it cracks down on U.S. sanctions evasion. What does the Jensen Huang scandal say about the scope of Beijing's influence operation in the U.S. technology sector? Plus, will it affect President Trump's discussion with Chinese leader Xi Jinping at their upcoming APEC summit? NTD's Steve Lands taps Stephen Mosher for insight. He's the president of the Population Research Institute. Mosher was also involved in the first effort by the FBI to set up serious counter-espionage operations against Chinese spying in the U.S. Here's more. Stephen, I have to ask you about CEO Jensen Huang, NVIDIA, one of America's largest tech companies, targets of a Chinese espionage campaign. What does this say about the scope of the CCP's influence operations across our technology sector right here on American soil? Well, I think the effort is much larger and has been going on much longer than many people realize. And I say that as someone who was involved in 1999, which is 27 years ago now, in the first effort by the FBI to set up serious counter-espionage operations against Chinese spying in the United States. I traveled to the major FBI bureaus across the United States, met with the counterintelligence teams who were being set up to target and defeat Chinese espionage. That was in It was in 2000, 2001. And then we were distracted by 9-11, and we put all of our resources into terrorism. But the Chinese weren't. The Chinese Communist Party continued. It's espionage efforts over time. We know that Fang Fang came over and had a relationship with Eric Swalwell in 2012. I know there were others from personal experience. I've been approached, for goodness sake, as a critic of China, as someone who's written books, testified before Congress, served on a presidential commission. I've had a very attractive Chinese woman come up to me and express interest. Of course, I immediately said, no, I'm happily married and left. Unfortunately, Jensen Huang didn't do the same thing. I think he deeply regrets having succumbed to the advances of the woman known in Chinese as Huang Le. Le meaning happiness or joy or pleasure. It's been a pleasure. But I'm... I'm astonished that more American politicians, state politicians, national politicians, CEOs and other people aren't aware of the danger of falling into a relationship with a Chinese spy, a honeypot. In this case, I think that... Her background clearly indicated that she was spying for the CCP. I mean, her personal history, she claims to be a former TV broadcaster, but no one in her native province of Hunan supposedly knows who she is. Her personal history is a blank slate. No one knows where she was born, who her parents were, how she came by the money to incorporate in 2023 the Huang Le Company named after her, and then a few months later sold it. To a company in Singapore called Megaspeed, which virtually overnight became NVIDIA's largest customer in Southeast Asia. It had, what, $5 million, $6 million in the bank and ordered $5 billion of NVIDIA's chips and equipment. Where did the billions come from? I wonder if Jensen Huang ever thought, ever wondered where all those billions of dollars came from to buy these very advanced high-end GPUs. That the Chinese Communist Party is desperate to get their hands on. But this is a lesson for everybody in the US government, for everybody in the high tech field, for everybody in any area that China is interested in stealing intellectual property from. Do not fall for this kind of bait because it always ends badly, not just for you personally, but for the United States of America. In the meantime, President Trump is set to meet with Xi Jinping at the upcoming APEC summit in Shenzhen. How do you think this espionage revelation, there's been many in recent days and months, will affect their discussions, particularly around supply chains and semiconductors? Well, I think President Trump was once asked about Chinese spying in the United States and he said, well, they spy on us and we spy on them. In other words, the. The onus is on us. The burden is on us to defend ourselves against spying by the Chinese Communist Party. The tiger is never going to change its stripes. So we have to be careful in our dealings with Chinese companies, with the Chinese state, because we know that they are stealing hundreds of billions of dollars in intellectual property from the United States every year. They've been doing that for the last 30 years. There's no Surprise here. There's no change in behavior. They will not change their behavior. We simply have to be better at defending ourselves against these kinds of efforts to steal the crown jewels of American technology. We're two or three years ahead of them in artificial intelligence. They will not be able to catch up with us because they cannot innovate. They must steal in order to try to keep pace with us. If we can stop the stealing, if we can stop the espionage, we can win in space, we can win in artificial intelligence, we can win in robotics, but we must stop the espionage. Stephen Mosher, as always, really appreciate your insights. Thank you. Secretary of War Pete Hegseth mandating education reform at America's war colleges. He says he wants to bring back merit-based opportunities, saying the service schools have become dangerously civilianized. And he. NTD's Jason Perry has the details. And he says, quote, frivolous research into gender fluid studies or climate fads has been removed from service schools such as the United States Marine Corps War College and the Army War College. Heg said, then announcing 33 new directives, which he calls a complete overhaul to reform the Department of War's senior service colleges. He gives one example, which is effective immediately. There'll be no more 80-page theoretical written theses as the primary capstone of war college achievement. In its place, we are establishing competitive SI-assisted wargaming and high-stress decision-forcing scenarios as the centerpiece of senior officer evaluation. Jason Perry, NTD News. Foreign automakers are increasing their U.S. investments in response to tariffs. The latest example is Japanese automaker Honda. It will build a $3 billion auto plant in Ohio, creating 2,000 jobs. The announcement was made Monday. Honda is planning another $338 million investment in the same state and unspecified new investments in Georgia and Alabama. Last month, German luxury carmaker Audi said it would build a $4 billion assembly plant in Georgia, creating 4,500 jobs. Further back in July, Japanese carmaker Toyota said it would spend $3.6 billion to build a truck assembly line in Texas and shift some production from Mexico back to the U.S. Two neighbors of China are deepening their ties to counter common threats in the region. The Vietnamese president and the Japanese prime minister met in Tokyo on Monday, opening a new chapter in the relationship of their countries. Today, we are... The joint vision statement between Japan and Vietnam that we are announcing today will elevate the relationship between our two countries to a new level. Level. The two countries agree to expand cooperation across a range of fields, including energy security, space technology, and semiconductors, especially critical minerals. Beijing is using economic pressure on Japan as political retaliation, including limits on rare earth shipments. Vietnam has the world's fifth largest rare earth reserves. However, its actual mining and processing capacity remains very limited. This is where Japan's assistance could come into play. Another area where Japan can lend a hand is energy security. In April, Japan announced a $10 billion financing plan to strengthen Asia's energy security and ensure reliable access to critical resources during global disruptions. Vietnam became the first country to launch a project under the initiative in May. On the same day, Monday, Secretary of State Marco Rubio met with his Japanese counterpart in Paris. The meeting took place on the sidelines of the meeting of the Group of Seven Countries. The two diplomats reaffirmed their commitment to strengthening deterrence in the Indo-Pacific region with an eye on China's military expansion. Coming up, the largest U.S. oil company, ExxonMobil, moving a step closer to returning to Venezuela to produce oil. That's after leaving there almost two decades ago. More on the oil giant's preliminary deal with the South American nation. That's next. Welcome back to China In Focus. I'm Tiffany Meyer. A possible return for an American oil giant. ExxonMobil has signed a preliminary agreement with Venezuela's state oil company PDVSA to look at opportunities for producing oil in the country. The memorandum is non-binding. I hope this memorandum will very soon be translated into concrete agreements, and that those agreements will begin, in the very near future, to generate the results we expect from investments of this nature. A formal contract would still be needed before any drilling begins. Exxon left Venezuela nearly 20 years ago after Hugo Chavez's government seized its assets. A return would advance President Trump's effort to rebuild Venezuela's oil industry with American companies in the lead. The move comes after U.S. forces removed Nicolas Maduro from power in January. Whether it leads to drilling depends on talks still ahead. As the Jensen Huang scandal keeps brewing, I spoke to Nicholas Epitemiades yesterday on Tiffany Meyer Tonight for Insight. He's the author of Chinese Espionage Operations and Tactics. Nick's 34-year government career includes employment in the CIA, State Department, Bureau of Diplomatic Security, and the Defense Intelligence Agency, where he served as a senior intelligence officer. Let's dive in. It is estimated that the cost of IP theft of U.S. trade secrets by China is $250 to $600 billion each year. Now, one of the ways this happens is through honeypot schemes. There's actually a 2020 film on NTD Plus called Reject that details what this can look like in action. This is following the story of an American businessman who was blackmailed after a trip to China went wrong. What can the use of female Chinese spies look like both in and outside of China? Well, it sort of varies given the target set. In this case, you know, it wasn't technical information that she would have been after, right? You don't recruit someone, the CEO, for information like that. That's your recruit. You know, there's a saying, you don't recruit the general when you can recruit the secretary. You know, who has access to all the same information, but in this case, it was access to policy information and the ability to influence that policy information, which, you know, put her in great position to be able to collect and then to provide back to the Chinese Communist Party. And broad picture here, China wants to win the AI race with the U.S. Now, I've seen reports that Beijing-backed actors have spread false information about U.S. data centers on social media, as well as deploying female spies targeting American tech executives. Is the bigger national security concern here advanced U.S. AI chips being smuggled to China or the potential damage to America's leading AI executives' reputation, which could in turn significantly hurt, in this case, NVIDIA's development? Right. Actually, it's both. In this case, it's the potential for China in acquiring more NVIDIA chips. And it's sort of an open secret in China that they are acquiring NVIDIA chips. I mean, that is not particularly secret at this point, that they are being smuggled via Singapore, Malaysia, Taiwan. I mean, this has been ongoing. And in fact, the Department of Justice has made arrests over the last year. So the fact that's happening is established. The fact that they are now putting Southeast Asian data centers and then selling that advanced capability back to Chinese state-owned enterprises and Chinese companies, that's also been established. In fact, that's what probably triggered this investigation, was the fact that Alice Wong was involved in doing that in Malaysia. That actually triggered the investigation. And, you know, when when NVIDIA general counsel inquired the Department of Commerce what was going on, that's when things got referred to Department of Justice and we started getting a serious criminal investigation. So the fact that this is ongoing is sort of an open secret and the government is thrashing about trying to find ways to clamp it down and to restrict it. She was moved into a position where she could influence that process. I want to dig into that a bit more, but first, this is one high profile case that we know about. Talk to us about the scale. Is this just the tip of the iceberg? Do we know how widespread this is? Oh, yeah. I mean, this is, look, we had, as far back as 2000 that I can remember, in the 1980s, in fact, Katrina Lung and the FBI senior agent, Jim Smith, a French senior colonel for their external intelligence service, the DGSE, Henry Magnon. He was recruited by a lover in Beijing, and she was working for the Ministry of State Security. Taiwan Major General Liu Xinzhi, same thing. I am a trap for him in Thailand and many, many others. So it's a normal process for how Beijing conducts its espionage activities. And to your earlier point about the investigations, when media reports like this come out based on either leak or classified sources as a federal investigation is ongoing, is it jeopardizing that investigation or would it have been worse if it had never been uncovered by the media? Well, that's a really interesting point here. Who leaked it and why? I mean, we know that this information that was known to the president and to the administration for a year. So did they elect not to do anything about it? Did they elect to watch it and then to see what the requests were out of from NVIDIA? Or did some person internally said, you know what, I'm going to put an end to this because once the information became public, the operation is over. So, you know, they effectively made it public and thwarted the entire operation. Now, whether that was by design or whether that was someone internally, that's unknown. And when it comes to countering China, in your view, what more can the U.S. do to protect its AI industry from China's influence and espionage? Well, that's a, you know, the U.S. is faced with a sort of a difficult situation here. They are dealing with, say, an adversary or problem that they're not used to dealing with, right? Then this is attacking industry, private industry in the United States. And our government isn't set up to really protect that industry. So we ask industry to create a whole nother capability to protect themselves inside a threat personnel. And that's got to happen. There's got to be a better education program inside private industry. There's got to be better collaboration with the government. There's got to be rewritten laws. Some of the laws that we work on date back to World War II or prior to World War II. And they didn't account for manipulation and theft in the digital age. So there's a lot that needs to happen across government and across industry to educate their own population and to work towards thwarting this threat. I will say your book is a great place to start. But Nick Efthymiades, as always, thank you so much for joining us. That's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show or have something you'd like to see us cover, send us an email at chinainfocus at ntd.com. We'd love to hear from you. For on-the-clock original news coverage, visit us at ntd.com or download our NTD app. Thanks for watching. See you tomorrow.