Nvidia: honeypot may have been aimed at 'lobbying Jensen Huang to lobby the US government'

This is apropos. Tech giant NVIDIA has been plunged into turmoil after its CEO acknowledged having an affair with the woman U.S. officials believe had been spying for China. Jensen Huang is regarded as the godfather of the AI economy. The executive every player in the industry turned to because the technology depends on the graphics processing units his firm designs. Those chips make NVIDIA one of the most valuable companies in the world, as Cars Garland reports. She's at the center of an internal investigation at one of the world's most valuable companies. Alice Huang, seen here in a pink dress, is a tech executive, but she's also alleged to have had an affair with NVIDIA CEO Jensen Huang and spied on him for China, according to last month's New York Times report citing U.S. intelligence officials. The AI chipmaker has now been plunged into turmoil after the company announced it would investigate the relationship. In an email to staff, Huang admitted to having an affair and apologized. I support the investigation and will cooperate fully. I love our country and our company. I'm committed to protecting NVIDIA and supporting America's national security. China is in a race for tech dominance against the U.S., which restricts the export to China of the most cutting-edge silicon chips. The story of Huang's affair has raised alarm bells among lawmakers in Washington, though NVIDIA's board said it had no reason to believe that national security or company secrets had been compromised. Beijing, meanwhile, again rejected the spying claims. The narrative of a so-called Chinese spy is entirely baseless vilification and a smear. The New York Times piece said Alice Huang was a former executive of a Singapore-based data center company called Megaspeed International, whose website prominently touts its partnership with Nvidia. The report also said Donald Trump had been briefed on the intelligence findings about Huang's relationship roughly a year ago and chose not to act on it. The president said on Sunday he didn't regret not acting on the information. To discuss the fallout, we're joined now by Steve Tsang, Director of the SOAS China Institute. Steve, thanks so much for being with us on the programme this evening. It is, of course, impossible to say at this stage, we don't know the details of this case, but in your view, is it likely or possible that sensitive information was being passed on to China here? And how exactly will the company go about establishing what exactly happened? Well, what the company will do, I think really we have to wait and see. But I think when we are looking at the Chinese government using an asset, intelligence assets, to access Jensen Huang, it can be a matter of getting vital information about new developments of new chips and how they can or cannot be supplied to China. But it can also be about effectively lobbying Jensen Huang to lobby the U.S. government because he is a very powerful figure, particularly during the Trump administration. And he, for whatever reason, has been taking a position that is beneficial to Chinese development and advancement of its AI capacity. Can you tell us a little bit just about why NVIDIA has become so central to the whole AI industry? It's become really a strategically important company for both the US and also for China. Well, it is vital because it is quite simply the absolute leader by a long way in the production of the most advanced chips that AIs will need. And as your report also indicated, Jensen Huang effectively is a kind of godfather figure supporting the advancement of AI. And since the Chinese government under Xi Jinping is determined that China will be the leader of AI moving forward, being able to have access to the media, Where do governments, be that Washington, be that Beijing, be that countries here in Europe, need to draw the line when it comes to protecting national security and restricting, on the other hand, international trade? Now, I think that really is a matter for governments to decide. What I think is the really important issue with this particular news story is the very fact that the United States government at the very senior level knew about the presence of these Chinese government intelligence agents by the bedside of Jensen Huang and decided to do absolutely nothing. I think that tells us hugely about how we are engaging in our competition with China and how we are defending some of the most sensitive and important technologies we have that can maintain the edge of the democracies over China. Then is what we're seeing here essentially Washington trying to preserve its national security as it claims, or is it simply trying to preserve that technological supremacy that you refer to when it comes to the US's current advantages over China? Well, what it looks like is President Trump deciding what he wants to do in terms of his friendship with Jensen Huang and in terms of what he believes to be his friendship with Xi Jinping, rather than thinking first and foremost about what is in the national interest of the United States. Thank As defined in a much more conventional way in terms of, for example, the technological competition between China and the United States in the most important new technologies the world is engaging with at the moment. China also has made advances when it comes to AI, but Steve, does it you. have the capacity to challenge the US's current dominance when it comes to artificial intelligence? I don't think the Chinese are looking at it in terms of China challenging the American dominance. The Chinese government looks at it more in ways of China should be the global leader in AI. And it should not be the United States that is the global leader in AI. And at the moment, we are seeing a gap of the United States being a few months in advance of China. So the gap is relatively narrow. So if the Chinese can gain the advantages that it appears they are trying to gain through the use of this intelligence asset by the side of Mr. Huang, They are getting a much better chance of closing that gap and advancing themselves ahead of the Americans. What do you make of the timing of all of this coming as it does so close to Donald Trump's next round of talks with the Chinese president? I suspect that this information came out probably because of the result of the midterm elections rather than because of the forthcoming sidelined meeting between President Trump and Chinese leader Xi Jinping. I think the reality is that nobody seriously expects I don't expect Trump to get much of anything from Xi Jinping anyway, and therefore, I Making the atmosphere a bit more difficult is not going to change very much. But being able to see that Donald Trump's presidency is deeply wounded by the midterm elections may well be the reasons why some people were bold enough to talk to the New York Times journalist to leak this story. How serious a crisis is it for the company next? Where does it go from here and what about the future of its CEO? I think the future of the CEO is probably less of an issue because the company did rely so heavily on Jensen Huang. So they would really have to think very, very hard before they even contemplate the idea of replacing him with anybody else. The issue here is what kind of investigations will be conducted, how thorough and what kind of questions they are going to ask, and whether all those information will be released publicly in the way that could damage Jensen Huang and therefore the company. And I suspect that there might well be a bit of political correctness in how far they would want to go in that direction. When it comes to these allegations about spying, because those kind of accusations, when it comes to espionage, become some kind of instrument that is then used politically in this broader geopolitical confrontation that we've seen develop between the US and China. Well, the Chinese have developed the world's biggest spying operations, partly because they have the capacities to do that, and it is a high-priority matter for them. The one important distinction between the way how most Western democracies deal with, use their intelligence capacity and how the Chinese do it is that most Western democratic countries... Only use their state intelligence operations for national security related purposes. China use it not only for national security, but also for commercial secret acquisitions. So it is a lot easier to believe that the Chinese are heavily involved in an operation like this, directed against the world's most important and valuable company at the moment. And can, you know, this kind of innovation that we've seen when it comes to rapidly moving technology, can it actually flourish in an environment that is potentially going to be increasingly dominated by this geopolitical rivalry between two of the world's big superpowers and national security concerns? I think we should not forget that in most of human history, most countries were autocratic and they were engaged in competitions and difficult relationships. And technological advancements still happen in those situations. So we are much more familiar with liberal democracies being more conducive to that kind of development and forgot that it doesn't have to be in the ideal conditions for technological advancements to happen. Steve, we'll have to leave it there for now. Thank you so much for being with us on the program. That's Steve Tsang, director of the SOAS China Institute.