Nvidia spy scandal sparks panic among Chinese AI companies over access to advanced chips

Chinese AI firms are rushing to reserve Nvidia-powered computing capacity overseas amid fears that a controversy involving CEO Jensen Huang could trigger tighter US restrictions. The proposed rules could make it harder for Chinese developers to access advanced AI chips through foreign data centres.Chinese AI companies are seeking overseas Nvidia computing capacity as scrutiny intensifies. (File Photo: Reuters)New Delhi,Nov 12, 2026 12:21 ISTChinese AI companies are scrambling to secure access to Nvidia's advanced processors, with some approaching overseas data centre operators to reserve computing capacity. The rush comes amid fears that a controversy involving Nvidia CEO Jensen Huang could lead to tighter US restrictions on how Chinese companies access the chipmaker's technology, Reuters reported. The companies are concerned that a route they currently use to get around Washington's export restrictions could soon become harder to access. While the US does not allow the export of Nvidia's most advanced AI chips to China, developers can still rent computing power from data centres in other countries that use these processors.According to the report, a major Chinese cloud provider has already discussed securing overseas chip capacity internally. Other companies have approached data centre operators about reserving computing resources, while smaller AI firms are exploring similar arrangements with providers in Southeast Asia. The immediate concern is a possible change in US rules. Chinese companies fear that the controversy surrounding Huang could increase pressure on American lawmakers to regulate remote access to restricted chips.At the centre of this concern is the Remote Access Security Act (RASA), a proposed US law that would give the Commerce Department powers to oversee cloud-based access to restricted technology. The US House of Representatives approved the bill in January with 369 votes in favour and 22 against. It is currently awaiting consideration in the Senate.If the legislation moves forward, Chinese AI developers could find it much harder to rent computing power built around Nvidia's high-end processors. These chips are widely used to train and operate large AI models that power chatbots and other generative AI services. How the Huang controversy threatens China's AI ambitionsThe renewed anxiety follows reports involving Alice Huang, a former executive at Singapore-based cloud computing company Megaspeed. Nvidia CEO Jensen Huang said on Sunday that he had been unfaithful to his wife. The New York Times later identified the woman involved as Alice Huang and reported that US authorities had concluded she was a Chinese intelligence asset.The controversy has drawn attention to Megaspeed, which has faced allegations that it helped Chinese customers obtain access to advanced Nvidia processors despite US export restrictions. The company has denied illegally diverting chips to China. Alice Huang also reportedly had business and investment connections with major Chinese technology companies, including Tencent and Alibaba. Both companies did not immediately respond to Reuters' requests for comment.Meanwhile, concerns about a possible US crackdown are extending beyond cloud computing. Traders and intermediaries in China have reportedly started stockpiling restricted Nvidia AI processors in the grey market, fearing tougher action against the smuggling of chips and AI servers.The pressure on US export controls is not limited to cloud-based access. Nvidia's H200 processors reportedly reached a Chinese university linked to the People's Liberation Army last month, even though the institution is on Washington's export blacklist, according to procurement records.There is also a separate investigation into the movement of Nvidia-powered servers into China. In March, US prosecutors brought charges against Super Micro Computer co-founder Yih-Shyan "Wally" Liaw and two others, alleging that they helped route servers to China through a Southeast Asian company. The company involved had bought nearly $2.5 billion worth of servers from Super Micro between 2024 and 2025, prosecutors said. A substantial number were allegedly sent to China. The defendants have not been convicted.- Ends