The Alice Huang story American media missed

Jensen Huang has confessed to an extramarital affair. But his private life is not the point. Chinese regulatory and court records tell a story about the woman that American media has missed. Alice Huang was a senior executive and 25% owner of a Shanghai private equity firm. That firm was penalized by Chinese regulators for hiding its stake in a listed company while helping a rogue financier seize control of it. The financier was later sentenced to life in prison for a fraud scheme that raised more than $11 billion. The firm’s founder, her former business partner, was detained by Shanghai police this year on suspicion of stock manipulation. In China, a past like that is leverage in the hands of the state.Ms. Huang then resurfaced in Singapore, founding a company now suspected of smuggling billions of dollars in restricted Nvidia chips into China. U.S. intelligence has reportedly concluded that she passed information to Beijing. And this is the woman the head of one of the world’s most consequential chip companies kept close in both his personal life and his business. According to the New York Times, President Donald Trump was briefed on this a year ago but did nothing. That silence is profoundly alarming. No amount of business genius can buy an exemption at the expense of America’s national security. The national interest must always outweigh the stature of any single company or CEO.To understand the threat, one must understand the Chinese system. A person does not need to be a trained spy to be drafted into service. Her own past is the strongest hold Beijing has over her. China’s National Intelligence Law also requires all citizens and organizations to support and cooperate with state intelligence work. So if Beijing ever wants her cooperation, getting it would be all too easy. The red flags were glaring and public. In October 2022, the United States rolled out stringent chip export controls. Just five months later, a Chinese gaming company transferred its Singapore subsidiary to Ms. Huang, and it was renamed Megaspeed. In November 2023, the company was passed to a Singaporean shell company. Four days later, it was named an Nvidia cloud partner. By the end of that year, Megaspeed held a mere $5.7 million in cash. Yet at a time when Nvidia’s chips were so scarce that the biggest tech companies waited in line, it went on to import $4.6 billion worth of Nvidia hardware. That was tens of thousands more chips than Nvidia itself found when it checked Megaspeed’s data centers. The Nvidia CEO has publicly insisted that Nvidia chips are not being diverted. U.S. officials reportedly believe he did not know what she was doing. That may be true. But given a relationship this close and a past like hers, a thorough investigation is hardly too much to ask.All of this unfolded while Washington was debating how much to sell to China. The Nvidia CEO has long argued in public that America should not give up the Chinese market. He lobbied the administration to loosen export curbs on chips bound for China, and it approved sales of Nvidia’s H200 chips there. Sen. Tom Cotton (R-AR) asked the Commerce Department to look into Megaspeed a year ago. Yet the Nvidia CEO never received the defensive briefing that intelligence agencies usually give Americans targeted by foreign spies. A Commerce Department investigation into Megaspeed was abruptly handed to the Justice Department right after Nvidia’s general counsel emailed Commerce asking about it. When the scandal broke, Trump’s instinct was to praise him as a “great, brilliant person,” declaring that “we want to protect our brilliant people.”THE VOTERS HAVE SPOKEN. BUT WHAT DID THEY SAY?Why should Nvidia be treated any differently? Last year, chip design software maker Cadence pleaded guilty to illegal exports to China and paid more than $140 million. In 2023, Seagate was fined $300 million for shipping hard drives to Huawei. In the Cadence case, regulators applied a “reason to know” standard. They did not need to read an executive’s mind to impose a penalty. By that standard, Nvidia had every reason to ask hard questions. Its CEO kept close ties to a woman whose past is bound up with a financier now serving a life sentence. If none of this is a warning sign, what is?Brilliance has never exempted anyone from scrutiny. Federal investigators have finally begun to look into Megaspeed and the CEO’s relationship with Ms. Huang. That investigation must follow the facts wherever they lead, and no one should be shielded from it. To let it quietly fade would be to announce that America’s security is open to negotiation. From the boardroom to the factory floor, Americans must be shown that no one stands above the nation.Jane Li is an independent China political economy adviser and has been quoted by Reuters, the Financial Times, South China Morning Post, and other international media on China-related business and political issues.