Jensen Huang Says Nvidia Counted All GPUs At Firm Under Probe For Spying For China

• The New York Times reported that U.S. intelligence agencies had surveilled Alice Huang, a Chinese citizen and former top executive at Megaspeed, to conclude that she was a Chinese intelligence asset. 
• Nvidia said that earlier allegations that Megaspeed helped companies evade U.S. export controls on AI chips “were thoroughly investigated and debunked last year.”
• Earlier this week, it was also reported that the U.S. Department of Justice inquired about how Nvidia’s planned acquisition of Hugging Face could affect competition in artificial intelligence.

Nvidia CEO Jensen Huang on Thursday reportedly said that the company’s dealings with a Singapore-based cloud customer under U.S. investigation were ordinary business, and that Nvidia has checked to make sure the firm did not illegally ship its AI processors to China.

“We’ve studied all their deployments of our GPUs and counted every one,” Huang said in an interview with Bloomberg.

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China is barred under U.S. export rules from buying Nvidia’s most powerful graphics processing units. The New York Times reported that U.S. intelligence agencies had surveilled Alice Huang, a Chinese citizen and former top executive at Singapore-based data center company Megaspeed, to conclude that she was a Chinese intelligence asset who had developed a close relationship with Jensen Huang and was passing information to Beijing.  

Shares of NVDA closed down about 1% on Thursday.

Nvidia Denies Allegations

In statements to Bloomberg and CNBC, Nvidia described Megaspeed as a typical regional cloud customer. A spokesperson said Huang’s interactions with its officials are not unusual because he speaks with thousands of customer executives every year. Customers receive ordinary business information but do not get access to Nvidia trade secrets or anything relevant to national security, the company said.

Nvidia added that earlier allegations that Megaspeed helped companies evade U.S. export controls on AI chips “were thoroughly investigated and debunked last year.” The spokesperson noted that the Chinese government has blocked imports of U.S. AI chips to protect its own industry, which led Nvidia to take large write-offs of inventory last year. Huang has publicly argued that U.S. restrictions have accelerated China’s efforts to build domestic semiconductor capabilities. Earlier this year, the U.S. approved the shipments of Nvidia’s less advanced chips to China, but Chinese regulators prevented imports.

Other Regulatory Concerns

Earlier this week, it was reported that the U.S. Department of Justice has inquired about how Nvidia’s planned acquisition of Hugging Face could affect competition in artificial intelligence.

According to a report from Reuters, citing people familiar with the matter, department officials have asked whether the Hugging Face deal would allow Nvidia to control a key distribution point for AI models and tools. The questioning adds to the years-long probe by antitrust regulators on Nvidia’s conduct, which kicked off under former President Joe Biden, the report said.

How Did NVDA Retail Traders React?

On Stocktwits, retail sentiment around NVDA stock fell from 'bullish' to 'bearish' territory over the past 24 hours, while message volume remained at 'normal' levels.

NVDA stock has gained 15% year-to-date. 

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