China calls Nvidia CEO spy plot claim a smear campaign

China's government said Monday that claims of a Chinese spy plot targeting Nvidia CEO Jensen Huang were unsubstantiated and amounted to a smear campaign against Beijing. The denial came one day after Nvidia's board opened an independent investigation into whether its founder had been the target of a foreign intelligence effort.local10.com

"The so-called Chinese spy allegation is unsubstantiated. It is nothing but smears against China," Foreign Ministry spokesperson Guo Jiakun said at a regular briefing in Beijing. A reporter asked a follow-up question about whether China denied that the woman worked for its intelligence agencies, and Guo gave the same answer.itv.com+2

Board probe and admitted affair

On Sunday, Nvidia's board said a committee of independent directors, working with outside counsel, would oversee the inquiry. The board said it had "no reason to believe" that national security or Nvidia secrets were compromised. The announcement followed Huang's admission to the board that he had been intimate with a business executive whom U.S. intelligence had determined was gathering information for Beijing, according to The New York Times. Huang, 63, will stay on as CEO while the investigation runs. In a letter to employees, he admitted being unfaithful to his wife and apologized to his family and colleagues.apnews.com+1

The Times reported in late October that U.S. intelligence officials had concluded Alice Huang was passing information to Beijing. She is a Chinese executive linked to Megaspeed, a data center company based in Singapore. Megaspeed has denied illegally shipping Nvidia chips to China. It says inspections by U.S. and Malaysian authorities, and by Nvidia itself, found no evidence of wrongdoing. After the Times report came out, Beijing called it "groundless speculation".nst.com.my+2

Market and political fallout

Nvidia shares fell in premarket trading Monday after the probe was announced. In Washington, the chairs of the House Foreign Affairs, China Select and Intelligence committees have asked Huang for a closed-door briefing, according to Reuters reporting cited by Yahoo Finance. Their letter said the episode "raises significant national security concerns".finance.yahoo.com+1

The controversy is growing a little over a week before a planned meeting between Chinese leader Xi Jinping and U.S. President Donald Trump. It also adds to questions about Huang's push to loosen export restrictions. He lobbied Trump to let Nvidia sell its H200 chips to China, though it is unclear whether Beijing will let Chinese companies buy them in large numbers. Important questions are still open, including whether Alice Huang passed information to Chinese intelligence and, if she did, what she passed.news.bloomberglaw.com+2