Report alleges $7.5bn Nvidia AI-chip diversion to China

By Marcus Bennett

At least 10 trillion won ($7.5 billion) in Nvidia AI chips reportedly reached China through a supply network built around Alice Huang. The Information said in a report published on the 10th that Huang used her close ties to Chief Executive Jensen Huang to channel Nvidia chips totaling 240,000 units into the country.

The report described Huang as the woman alleged to have had an affair with Jensen Huang and suspected of spying for China. Citing people familiar with the matter, The Information said she played a central role in the diversion.

It also cited signs that Moonshot AI, a Chinese startup, used Nvidia chips that never received U.S. government approval. Those cases point to wider enforcement gaps in Washington’s technology export controls.

The network and its customers

Huang, her husband, Kang Wei, and her younger sister, Huang Yu, built a corporate network that the report said stretched across three Asian jurisdictions to bypass U.S. controls.

• Shanghai-based Century Lituo was established in June 2023 and won Nvidia partner status in four months. That status gave it priority access to chip allocations.
• Mega Speed operated in Singapore, while Speed Matrix operated in Malaysia.

The Information said: "Alice Huang told customers she could secure supply at any time, citing her close relationships with Nvidia and its distributors." The network provided computing resources built on those chips to Alibaba, Tencent and smaller Chinese AI companies.

The Blackwell Ultra contract

Bloomberg reported that Moonshot AI signed a contract in August to lease 32 Supermicro servers through the black market at a 350% premium to market rates.

The servers carried Nvidia Blackwell Ultra (B300) graphics processing units, which the report called the highest-performing AI accelerators currently available. Several details indicated an unauthorized diversion:

• The servers were listed in Qingyang, Gansu province.
• The chips were owned by Lingmeixin, a drone maker and partner of the Chinese military.

The case also indicated that the most advanced chips, which the United States did not consider for export licensing, had reached mainland China. Exporting the B300 to China requires separate U.S. government approval, so the arrangement raises the possibility of an export-control violation.

Export-control decisions

The Financial Times reported that the Defense Department, now the Department of War, and the State Department pushed to add Mega Speed to the export-control list over suspected smuggling. Commerce delayed the move and took no action.

Axios reported that Commerce Secretary Howard Lutnick, whose department oversees chip export controls on China, received a document warning about Jensen Huang’s relationship with Alice Huang before Trump’s May 13-15 China trip. On May 14, Commerce approved Nvidia H200 purchases by about 10 Chinese companies.

Trump also appears to have received repeated briefings. The New York Times reported that Secretary of State Marco Rubio told the president about the relationship aboard Air Force One en route to China in May. Jensen Huang had been left off the delegation. Trump then added him during a refueling stop in Alaska, where Rubio delivered the briefing.

What does this change for Nvidia’s leadership and customers?

Congress is preparing to investigate. Republican chairmen of the House Foreign Affairs Committee, the House Intelligence Committee and the House Select Committee on Strategic Competition with China have asked Jensen Huang to attend a closed-door briefing next week.

Some Republicans have called for his resignation. Senator Kevin Cramer, a Republican member of the Senate Banking Committee, said he believed Huang should step down because he handles products as sensitive as Nvidia chips.

Uncertainty has reached operations. Jensen Huang came into headquarters that day and chaired meetings as part of his normal routine. Even employees who viewed him as an unquestioned leader described the scandal as a shock.

Taiwanese media reported that headhunting firms are searching for a successor if Huang resigns. Candidates include AMD Chief Executive Lisa Su and Rene Haas, chief executive of British chip designer Arm.

President Donald Trump, who has defended Huang, said he will not bring him on his China trip next week. The inquiry turns leadership continuity into a live issue. For customers, it adds policy risk around controlled chip allocations and export approvals.