U.S. Probes Nvidia AI Chip Exports to China Worth 10 Trillion Won

'Jensen Huang Scandal' Spreads

Alice Huang Faces Chinese Spy Allegations

Set Up Entities With Husband, Younger Sister

Used Singapore and Other Detours to Secure 240,000 Chips

U.S. Government Was Briefed but Control Gaps Remained

Claims have emerged that Alice Huang, who faces allegations of spying for China, supplied Chinese companies with at least $7.5 billion in Nvidia artificial intelligence chips. The transactions allegedly relied on her personal ties to Nvidia Chief Executive Officer Jensen Huang, with Huang's family members and business associates also involved. The case has drawn criticism that U.S. semiconductor export controls on China had a major loophole because Washington had prior knowledge of the matter but failed to act.

240,000 Export-Restricted Chips Supplied to China

The Information and other technology media outlets reported on November 10 that Alice Huang used a network of companies in China, Singapore and Malaysia to obtain Nvidia semiconductors. Kang Wei, identified as her husband and business partner, and her younger sister Huang Yu also helped.

At the center of the supply chain was Century Litong, a company established in Shanghai in June 2023, the reports said. One of the founding shareholders at the time of its incorporation was controlled by Huang Yu. Century Litong obtained Nvidia's preferred cloud partner status in October 2023, four months after it was set up. The designation is given to companies with the technical ability to operate Nvidia equipment and a certain level of sales, allowing them to receive priority allocations of AI chips. It came as the U.S. government was strengthening export controls on Nvidia AI semiconductors to China.

The Information reported that Century Litong secured substantial volumes of semiconductors through Nvidia distributors. Whenever supply was cut off, Alice Huang stepped in to help complete the deals.

The number of export-restricted semiconductors linked to her China supply activity is estimated at 240,000 units. They were mainly Nvidia H100 and H200 graphics processing units, with some A100 chips included. The Information said the $7.5 billion figure referred to the total volume of semiconductors estimated to have been supplied to Chinese companies and did not mean all of the transactions were illegal.

A Singapore entity called Mega Speed was identified as a procurement channel. Alice Huang served as an executive at the company from March to November 2023. Mega Speed set up a Malaysian subsidiary, Speed Matrix, around February 2024. Some of the Nvidia equipment purchased by that unit was later transferred to Century Litong, according to the report. That ties a Singapore company in which Alice Huang took part in management to a Chinese company whose founding shareholders included an entity controlled by her younger sister.

Trump Received Related Briefing in May

The case also exposed weaknesses in U.S. semiconductor export controls. The Financial Times reported that several U.S. departments, including the Defense Department, State Department, Energy Department and Treasury Department, pushed to place Mega Speed on a restricted trade list. The process was delayed, however, after the Commerce Department said more information was needed.

Axios reported that Commerce Secretary Howard Lutnick received a top-secret memo in advance warning about the relationship between Jensen Huang and Alice Huang. The outlet questioned how the Commerce Department assessed potential national security risks when approving Nvidia's sales of advanced semiconductors to China-related companies.

The New York Times also reported on November 10 that President Donald Trump, while aboard Air Force One en route to China in May, was briefed on allegations linking Jensen Huang to a Chinese spy operation but took no significant action.

Nvidia's board has opened an independent investigation into Jensen Huang. Politico reported that the Republican chairmen of the House Foreign Affairs Committee, the House Intelligence Committee and the House Select Committee on China asked Huang to appear for a closed-door briefing next week. Nvidia shares were trading at $168.89 as of November 10, down about 25% from a month earlier, amid fallout from the Huang scandal and related investigations.

Major Nvidia partners have expressed concern about the episode but have not shown major signs of alarm. d-Matrix, an AI semiconductor company that works with Nvidia, said its collaboration with the chipmaker is proceeding as planned and has not slowed.

Kim Dong-hyun, Hankyung.com reporter / Kim In-yup, Silicon Valley correspondent 3code@hankyung.com