China Says US Using Nvidia Spy Drama To Justify Chip ‘Blockade’ As Jensen’s Future Hanging By Thread

Nvidia sits at the center of the whole circular AI financing scheme. The leadership crisis at the chip giant is deepening as successive reports about CEO Jensen Huang’s extramarital affairs continued overnight.

Huang recently acknowledged an extramarital affair with a woman reportedly suspected by US officials of working for Chinese intelligence. A separate report overnight alleged a romantic relationship with Nvidia executive Kimberly Powell.

Shares plunged about 7.5% in premarket trading as the Nvidia board weighs Huang’s fate.

The Huang saga is moving quickly, and Beijing is getting angry.

China accused Washington earlier today of using spy allegations against Huang as a pretext to tighten restrictions on Chinese access to advanced AI chips. 

Foreign Ministry spokeswoman Mao Ning urged US officials to stop fabricating “spy” narratives to justify a technological “blockade.” 

Beijing has rejected those allegations as “groundless speculation” and an attempt to smear China.

The spy allegations center on Alice Huang, a former executive at Singapore-based Megaspeed whom US officials reportedly suspect of working as a spy for Beijing.

Meanwhile, Commerce Secretary Howard Lutnick has been caught in the crossfire over his department’s reluctance to designate Nvidia customer Megaspeed as a potential national security threat, CNN reported.

The report also highlights divisions within the Trump administration over Chinese access to advanced Nvidia chips. US officials have suspected Megaspeed of circumventing export restrictions through shell companies to funnel advanced US chips into China.

CEO Huang’s fate could be decided as early as today by Nvidia’s 10 board members. Any leadership change could spark concern about the premier maker of AI chips, amid broader concerns that a Democratic sweep could usher in a nationwide data center moratorium. Those fears, alongside ongoing cracks in the debt-fueled financing scheme behind chip stacks, have sent neoclouds and hyperscalers on a roller-coaster ride.

Who would replace him?

Notably, all of this Nvidia drama is happening just about a week before President Trump meets Chinese President Xi Jinping at an APEC leaders’ summit in China.

On Wall Street, Yorkville Ives technology analyst Dan Ives warned, “The reality is that the old Jensen is now gone in the eyes of the public, customers, and the technology world.”

Ives outlined several uncertainties: who would replace Huang, what an interim strategy would look like, whether the board would change, how Nvidia would navigate government investigations into the alleged Chinese spy issue, and the future of GPU shipments to China through Singapore.

He said, “The company and its leading edge GPU technology will go on, and it does not change the entrenched position Nvidia has in the AI Revolution chip arms race,” adding, “Jensen is not replaceable by another CEO or group of interim executives, but Nvidia likely now has to move on without Jensen at the helm, which seemed like a Twilight Zone episode narrative before Sunday afternoon when the news broke.”

Overnight, Elon Musk responded to our X post, “Elon please hire Jensen.”

Musk responded, “That would be an honor.”

Could this suggest Huang could run Musk’s Terafab?