ExclusiveNvidia Loses $430 Billion in Market Value | China in Focus

Welcome to China In Focus. I'm Tiffany Meyer. Our top story, the fallout from NVIDIA CEO Jensen Huang's affair with alleged Chinese spy, wiping out over $400 billion from NVIDIA's market value. More on the call for him to resign. U.S. ambassador to China saying the U.S. is not getting rare earth magnets from China at the level it should. Washington calling on Beijing to fulfill its trade agreements. A boost for U.S.-Taiwan ties. Some U.S. federal employees will work in Taiwan government offices for up to one year. That's after finishing intensive Mandarin language training and studies. That's quickly turning costly. NVIDIA's stock losing a whopping $430 billion in market value two days after its CEO, Jensen Huang, admitted having an affair with an alleged Chinese spy. Yesterday, NVIDIA shares dropped nearly 5.5%, following an over 4% decline on Monday. In the meantime, NVIDIA said it has hired a former federal prosecutor and his law firm to conduct an investigation into Huang. June H. Kim is former acting U.S. attorney for New York's Southern District. He investigated sexual harassment allegations against former New York Governor Andrew Cuomo. His firm, Wachtell, Lipton, Rosen & Katz, once helped Twitter to compel Elon Musk to complete his $44 billion takeover deal. Jensen Huang and NVIDIA are at the center of attention because they're critical to the world's AI industry, which in turn is shaping everything from economic development to military advancements. Both the U.S. and China are in an AI race to see who will stay ahead. While China still trails behind the U.S., there are concerns that China is getting around U.S. export controls to access advanced NVIDIA AI chips. Last month, a Chinese university tied to the Chinese military bought two NVIDIA H200 chips for over $100,000. The H200 is one of Nvidia's most powerful chips for training and running advanced AI systems. Its sale to China requires U.S. export approval, which is generally denied to blacklisted institutions like Northwestern Polytechnical University. Jensen Huang's affair is also sparking strong reactions on Capitol Hill. Democratic Senator Ruben Gallego said we need to know how much the Chinese spy influenced CEO Jensen's decision to sell advanced chips to China. And Senate Democratic Leader Chuck Schumer renewed calls to pass three pieces of legislation that aim to crack down on Chinese access to Western AI. President Trump has said he personally hopes Jensen Huang could stay on as NVIDIA's CEO. Senate Banking Committee's Republican Senator Kevin Cramer is calling for Jensen Huang to resign. It remains to be seen if this will happen. NVIDIA is structured in a way that's heavily dependent on Jensen Huang to personally manage things. As an analyst at Bernstein put it, Jensen is NVIDIA, NVIDIA is Jensen. If Jensen's out, then where does that leave NVIDIA? We'll keep you updated on future developments of this story. U.S. Ambassador to China David Perdue telling Bloomberg Wednesday that the U.S. is not getting rare earth magnets at the level it should. That's despite the U.S. having lowered the tariffs. We've been waiting for months on some of these very important elements that go into data centers and aircraft engine manufacturing and so forth. Last week, the Trump administration warned China that it must fulfill the promise of the trade deal made last year. Posting on X, trade representative Jameson Greer said he and Treasury Secretary Scott Bessent spoke with Chinese Vice Premier He Lifeng. During the call, Greer underscored the critical importance of China taking concrete actions to fully implement its past commitments, particularly as they relate to agricultural purchases, rare earths and other other critical minerals. He added the administration will continue to pursue balanced trade with China by monitoring compliance of past Chinese commitments. Some U.S. federal employees will work in government offices in Taiwan for up to one year. That's according to the de facto U.S. embassy in Taiwan. Under the program, an undisclosed number of U.S. federal employees will spend up to one year studying in intensive Mandarin language training and studies. Fellows who complete the program will spend up to one year in Taiwan parliamentary offices, ministries, other agencies or offices, or other organizations. The de facto U.S. Embassy in Taiwan says the program aims to strengthen the U.S.-Taiwan relationship as well as U.S. officials' expertise regarding Taiwan. The latest allegations involving NVIDIA raise big questions about how far China will go to get ahead of the U.S. in the race for global dominance. NTD's Steve Lan spoke with Steve Yates for Insight. He's the Senior Research Fellow for China and National Security Policy at the Heritage Foundation's Asian Studies Center. Here's more. Steve, it's great to have you back with us. So these allegations surfaced in late October that Alice Huang is a Chinese spy. NVIDIA has previously described her contact with Jensen Huang as ordinary business. How do foreign intelligence services exploit close personal and professional relationships to ultimately gain access to sensitive information? Well, I think there's a couple of layers of things going on here, but when it comes to sort of the counterintelligence concern, anyone that has privileged access to... Technology, economic data, political leadership, anyone who has personal contacts in their phone that might include, say, the president of the United States, you're going to be a target for almost every intelligence service on the planet, friend or foe, but especially the Chinese services, as they are the most plentiful in terms of personnel, the most equipped in terms of technology, and in some ways the most aggressive and, I think, increasingly sophisticated. So they can find people who are a mark. Mark is someone who's got that access, is maybe out traveling a lot, and might be away from office or home or whatever, and they find a way to connect. The idea is you create a relationship that can be leveraged, doesn't have to be right away, and they'll take patience to go years sometimes before they ever tried to push for disclosure. But sometimes it's to steal technology or steal information. Sometimes it's to shape things going the other way. In this case, it could very well have been trying to get Jensen Huang to talk with the president about relaxing standards for chips to go to China. But it also could have been not really trying to take technology, but enabling the technology that's restricted to go to China to go around third country loopholes to circumvent those controls. And I think there's a pretty dominant path, at least in that third regard. Steve, Alice Huang worked for a company called MegaSpeed. It is a Singapore-based company accused of diverting NVIDIA chips to China. NVIDIA says those allegations were debunked. How could access to these chips help China compete with the United States in the tech race? Well, we have pretty substantial evidence that the United States is ahead in some very important aspects of the AI race, as we sort of simply put it. And there are a lot of things that they do that's kind of draft behind our lead. So if we're looking at things that are not the cutting edge, but are good enough, they can get access to those kinds of chips. And they're pretty good about implementing them into their systems, working them at scale, and then putting things together to compete. Pretty effectively with us or anyone in the world. And so they're just sort of pacing the way a race car driver would close enough behind the lead car, and it helps them keep up. Now, if they get a particular break, that could help them leapfrog us at some point. But really being good enough takes them a long way. And basically, that's by getting through these loopholes. They can stay good enough, or sometimes they can capture technology that also has military application in that case. That's quite concerning because we are living in a revolution of military affairs in Ukraine. We've seen some things in the Iran conflict where missile defense systems, drone systems are actually vital in a lot of this advanced AI is very, very important to staying ahead of that. Jensen Huang, NVIDIA CEO, he's pushed to ease export controls on AI chips to China. So Steve, for people at home, why does it matter that we keep this technology away from our greatest adversary, given China's egregious human rights record, their military buildup, the transnational repression that we see on our soil, subversion, the list goes on. And how could it really affect our security and perhaps even our jobs? Well, first and foremost, a lot of the best inventions in this are being done by people who've invested research and development, blood, sweat, and tears, and their own creativity in the world's freest country. And we should be committed to protecting that intellectual property and make those who have made these wins actually be able to enjoy these wins. And so in a certain sense, even if you take the threat out of the picture, we should be proudly aggressive about protecting The bleeding out of the. This technology that takes a lot of time, effort, and money to be able to produce. Then when you look at how it could be used, well, of course, China is one of the most weaponized surveillance states. It is actively looking at ways to be able to harass its neighbors, deploying unmanned or unpiloted, however people want to say it now, kinds of platforms to be able to coerce sea lanes, claim territory, whether it's the Philippines, Japan, or Taiwan. And so it's very, very clear there's a straight line, not just in economic competition, but in military use. And of course, when you're talking about China, military use is often used by security services against their own people. And so that's why I think we need to be guarded about it and treat the world's most advanced technology as if we would weapons of mass destruction, because I think these are life and death technologies put in the wrong hands. Steve Yates, as always, appreciate you joining us. Thank you. Coming up, Florida examining whether the Democratic Socialists of America accepted money or other support from foreign countries like Cuba and China would trigger the move. That's next. Welcome back to China in Focus is Tiffany Meyer, foreign money and American politics under scrutiny. Florida has issued an investigative subpoena to the Democratic Socialists of America, or DSA, to find out whether the group broke state fundraising laws. And today's Dylan Monahan has more. Florida Attorney General James Uthmeyer says his office is examining whether the DSA accepted money or other support from what state law calls foreign sources of concern, including the communist parties of Cuba and China. And whether its fundraising from Florida donors has been fully transparent and lawful. Uthmeyer says there's evidence to suggest that the DSA is receiving funding and value from Cuba and China. Speaking on Fox News. So we want to get to the bottom of it. You better believe if Havana or Beijing think they're going to foot the bill of the DSA, Florida is going to investigate. It doesn't only violate our law. It's a national security issue. It tries to influence our elections. DSA members have traveled to both countries. In 2025, five members went to Beijing for China's military parade marking the end of World War II. At least one of them also took part in a program hosted by the Chinese Communist Party in Guizhou province. The same year, the DSA sent what it called a delegation of 40 elected leaders and rank-and-file members to Cuba. The group said its goal was to deliver aid and learn about the achievements and challenges of Cuban socialism. Uthmeyer says the influence of communist regimes Reaches all the way into American schools. Our universities, our colleges trying to indoctrinate our young people. So in Florida, we will prosecute to the fullest. We always enforce the law. We will hold the DSA accountable. Florida law requires nonprofits that raise money in the state to disclose their contributors, what the money is meant for, and how it is ultimately spent. It also bars them from soliciting or accepting any amount from a foreign source of concern. The subpoena seeks the documents needed to determine compliance. The DSA calls itself the largest socialist organization in America. Several left-leaning candidates in this year's midterm elections identified themselves as members. A separate nonprofit, the DSA Fund, describes itself as the group's political education sibling organization. Uthmeyer's announcement did not mention it by name. The DSA says it is aware of the subpoena but had no comment. What those records show will shape the next steps in Florida's investigation. Daniel Monahan, NTD News. An AI giant, Anthropic, has been pushing a bill on regulating AI safety and security. Is it helping consumers or corporations? I spoke earlier with Rex Lee, Cybersecurity Advisor at MySmartPrivacy, to break it down. Now, there's, of course, a lot of concern and headlines about AI and talk about potential federal regulations. So on that note, Anthropic CEO has been promoting a federal AI safety legislation called Aegis. Break that down for us. And what exactly would it do? Is it more helping the corporations or would it actually help consumers? Well, you know, like any other bill in Congress, the title usually means the opposite. Like with the Affordable Health Care Act, it turned out to be unaffordable for a lot of people. Thank you, Paul. It's almost the same thing because they're saying it's an AI safety bill, but it really reads more like an immunity bill for AI. They want to set thresholds of damages at $1 billion. And they also want to set thresholds literally on human life, on loss of human life at 50. Um, uh, as well, um, a lot, I think what's going on is the AI, uh, industry is looking what's happened in social media with all the mounting lawsuits. I think there's right now globally, there's over 6,500 lawsuits against, uh, uh, social media companies, and they're starting to include AI companies such as the state of Florida settling with Google over character AI and a death of a Florida child. Last year or earlier this year, and then Adams Law in California, which was another AI related death, they actually passed a new act signed by Governor Newsom called Adams Law, and they're starting to see that. Pattern evolved that we saw with social media over the last 10 years because within AI they're making it equally if not more addictive than addictive social media which included brain hijacking technology and manipulative advertising technology. That was bad enough but today what we're seeing is AI indoctrination technology noted as the ELISA effect and that combined with Those other two technologies, brain hijacking and manipulative advertising technology combined, it's really military-grade brain hijacking or brainwashing technology, as we discussed in the past. And the desks are starting to mount regarding these new AI agents like Muse and other AI agents that have become agentic. And then there's an avatar that you can build. Based on that, and what that does, what the ELIZA effect is, is it was discovered by MIT AI researcher Joseph Weisenbaum, and they discovered that people were humanizing ELIZA, the very first. AI chatbot ever invented in 1966. People were humanizing it and giving it authority, and then they realized that it could lead to indoctrination, brainwashing, and other uses. Thank So that's what they're seeing today. And that's why they're looking to cap their limits on damages and deaths to protect them from all of these multi-billion, you know, originally the $17 billion AG lawsuit started out a trillion dollars before they negotiated it down. And that's what they see happening with AI at this point. you. Now, one of the biggest names in AI, if you will, is NVIDIA, especially the AI chips, the high-end ones that are under export controls to places like China. Now, right now, dominating headlines is the CEO, Jensen Huang, the affair and the concerns about potential Chinese intelligence operations. What is your main takeaway and concern with all of this in the headlines? Well, that's a that's a good lead in because NVIDIA is actually could be tied back to this AI bill. And part of the immunity, a lot of people don't understand this. The Trump administration is not enforcing the Protecting Americans from Adversarial Controlled Applications Act, which would ban AI infused apps and platforms developed in China. Now, a lot of these developers in China, they rely totally on AI intellectual property developed in the United States because they have to develop their apps and platforms using GPUs like NVIDIA's GPU chip for the power, but they also have to utilize the IP from Google, Apple, and Microsoft. To be able to develop their AI apps in Android, iOS, and Windows. So it all ties back into this scandal. And part of Aegis. The AI Safety Act that's in front of Congress right now and committee, they're hoping to get voted on before the new Congress. Part of that gives immunity to these Chinese AI app developers. So if they're addicted, AI apps and platforms harm. For cause destruction, they would also be held to the same thresholds of 50 lives and a billion dollars in damages. So if you looked at part of the national security threat regarding the NVIDIA CEO, Jensen Ong. Scandal. Basically, he got caught up in an affair and and the person is tied to the Chinese Communist Party. That's what triggered it all. Now, if you look at it from unrestricted hybrid warfare lens, you know, this the terminology for this is he got honeypotted. And he fell for it and got investigated enough to where he has to step down temporarily while he goes through this investigation. But the big concern here is the use of NVIDIA GPU IP. Now, China's already got NVIDIA's GPU IP to a certain extent with older versions because they've been selling GPUs to Chinese AI app developers for years. And then recently there's been sanctions and China's trying to get their own chip makers to make the GPUs and all of that. So if you remember, Trump went to China over the summertime while Jensen went with him on that trip. Representing NVIDIA, trying to cut deals with AI developers in China. Now, the main threat that what we see going on today, if you go back to our interviews about Palantir Technologies, Gotham Core platform, it works off of AI data. Driven warfare, which is tech based hybrid warfare. That's the big concern here is that these faster chips will enable more development and then the weaponization of people's data, your personal information, your business information that's already been weaponized against us through military contractors like Palantir and China and Russia have the same technology capabilities. The newer GPU, IP, and technologies could further advance those national security threats that we see today. Rexley, as always, thank you so much for joining us. Thank you, Tiffany, for having me on. 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.