Nvidia spy-plot report revives scrutiny of offshore data centers serving China

An October 29, 2026, New York Times investigation has put Nvidia CEO Jensen Huang under an uncomfortable spotlight.

Citing U.S. intelligence findings, it says Alice Huang, a former executive at Singapore-based cloud provider Megaspeed, was identified as a Chinese intelligence asset and had become close to him. It also revives scrutiny of offshore clouds serving China. No public evidence implicates Jensen Huang in espionage.

From chip-diversion suspicions to an alleged asset

As reported by the Times, Alice Huang, better known as Huang Le, was first brought to the attention of the US authorities due to suspicion that she was facilitating the transfer of prohibited AI chips to China.

Further gathering of evidence turned out to be very suspicious and revealed that she was sharing intelligence with China, too. Although Alice Huang has a close relationship with Jensen Huang, they are not related. The accusations were made by persons who were familiar with classified security information and not based on arrest warrants or court decisions.

Reports suggest that President Donald Trump was informed about the results almost a year prior to the October 2026 report, but he did not take any steps.

He had apparently expressed concern that taking steps would affect Nvidia’s chip trade and trade negotiations with China. Jensen Huang, on the other hand, did not get any defensive briefing regarding the suspected intelligence threat. Alice Huang did not respond to the requests for comment, and the Chinese embassy in Washington referred to the claims as groundless.

Nvidia countered claims that Jensen Huang’s connection with Alice Huang is uncommon. Nvidia spokesperson John Rizzo told CNBC that the CEO meets numerous customer executives each year. He added that Megaspeed receives only routine business information, instead of trade secrets.

The company also insisted that claims about diverted chips had been “thoroughly investigated and debunked” in 2025. However, this is the position of Nvidia. It is not yet supported by government findings officially stating that Megaspeed was cleared.

Similarly, Megaspeed announced that it had enlisted the services of third-party attorneys to conduct its own investigation and confirmed that it would be collaborating with the US authorities. Still, the controversy that surrounds Megaspeed’s operations seems to persist despite the statements issued by either of the two companies.

Congress presses, and the export-control exposure is on record

According to The Times, the Commerce Department started investigating Megaspeed in late 2024 and forwarded the case to the Justice Department in 2026. ImportGenius data shows that Megaspeed’s Malaysian affiliate bought at least $4.8 billion worth of AI equipment containing Nvidia tech from June 2024 to February 2026, reflecting the equipment value, not Nvidia’s revenue.

Senator Elizabeth Warren wants more than reassurance. In an October 29 statement, the Senate Banking Committee’s top Democrat recalled urging Nvidia’s board in June to investigate the company’s compliance with U.S. export controls. She argued the latest allegations demand answers.

“NVIDIA’s Jensen Huang and NVIDIA’s board owe Congress answers.”

Warren also called for bipartisan legislation to prevent advanced American technology from reaching China.

The dispute comes as export restrictions are already taking a financial toll on Nvidia. Its SEC filing records a $4.5 billion H20 inventory and purchase-obligation charge in the first quarter of fiscal 2026, followed by a separate $400 million H200 charge in the first half of fiscal 2027. Nvidia also reported that Chinese restrictions limited sales even after Washington granted export licenses.

Would tighter rules slow China, or speed its substitution?

Stricter enforcement could make advanced chips harder for Chinese firms to access. But it might also give local suppliers a bigger opening. As Cryptopolitan reported, Bernstein projected Nvidia’s share of China’s AI-chip market falling from nearly 40% in 2025 to about 8% in 2026, with Huawei exceeding 50%. A TrendForce-cited survey expected domestic chips to account for 46% of accelerator spending over the following year, up from roughly 30%.

The Bloomsbury Intelligence and Security Institute cited Huawei and Cambricon’s nearly 80% share of China’s domestic AI-server market—a different measure. Goldman Sachs describes intensifying competition among Chinese AI models, while BCG sees an AI industry increasingly divided between the U.S. and China.

Would a crackdown slow China’s AI progress—or accelerate its shift to domestic chips?