The FBI is investigating whether Alice Huang, the Chinese businesswoman lover of former Nvidia CEO Jensen Huang, is a Chinese spy. The Justice Department points out that it has not yet determined whether it was. The president of the United States, Donald Trump, confirmed that it is still not clear. But the case has exposed the extent to which the affairs of the director of a key company in the race for artificial intelligence (AI) concern American national security. And the key role that espionage plays in the increasingly intense rivalry of the two global giants.
"The fact of the matter is, was this woman a spy? I don't know if that's been determined yet," Trump responded Thursday to an interviewer's questions about whether Jensen Huang was right to resign as head of the semiconductor giant. "If the woman was a spy, yes; if she wasn't a spy, maybe then it's different."
The case has certain similarities with the last major intelligence incident between the two giants: the flight of a Chinese hot air balloon that crossed US territory at the end of January and beginning of February 2023, and which ended up being shot down by a fighter jet in international waters of the Atlantic. Washington immediately denounced that it was a spy balloon; As now in the case of Nvidia, Beijing flatly denied the accusations. He claimed it was a weather balloon that had lost its course.
That episode, during the mandate of Democrat Joe Biden, precipitated the suspension of a trip by the then Secretary of State, Antony Blinken, to Beijing and froze relations between the two governments for months. The current one also casts a shadow on bilateral ties.
Although Huang's is the most notorious case in recent times, it is by no means the only one. Espionage between the two giants is common and something that both countries count on. The US Federal Bureau of Investigation (FBI) perceives intelligence rivalry as an existential issue. "Counterespionage and economic espionage efforts emanating from China and its Communist Party represent a serious threat to the economic well-being and democratic values of the United States. Addressing this threat is the high priority of the FBI's counterintelligence efforts," he states.
The respective espionage cases have increased as China has advanced in its development. In 2018, the US Department of Justice launched its China Initiative, an investigation campaign against economic espionage and the theft of trade secrets from universities and research centers. Joe Biden's Democratic Administration canceled it, concerned that the initiative was serving to unfairly harass academics, although investigations have continued.
Chinese attempts have multiplied since Xi Jinping came to power in 2012; The Ministry of State Security, responsible for the secret services, is more powerful than ever: according to the historian of intelligence agencies Calder Walton, it employs about 800,000 people, almost double that of the Soviet KGB in its golden years. If initially, during the Cold War, these services focused on obtaining military information, now they focus on technological and commercial secrets.
"Chinese espionage incidents exceed those of any other country, including Russia. Its long-term cost for the US economy and national security cannot be measured with foresight, but calculations reach billions of dollars for technological and commercial espionage," highlights a study by the Center for International Strategic Studies (CSIS), which finds 224 cases of espionage attempts by Beijing against Washington between 2000 and 2023. The 70% of them, since Xi took office.
The rivalry in this field is ruthless. In 2017, The New York Times published that between 2010 and 2012, China murdered around twenty American informants on its soil. Later information raised that number to thirty.
The detection of these assets was possible, apparently, due to the defection of a US agent and because their Chinese counterparts managed to intercept the communications system used by their adversaries. The coup, as the Times indicated at the time, was one of the worst in the history of the CIA, comparable only to that suffered by the betrayals of Aldrich Ames and Robert Hanssen in the CIA and the FBI, respectively. During the Cold War, both divulged intelligence operations to Moscow for years.
In recent years there have been attempts of all kinds. From the recruitment of agents in the military, academic or political sectors to access to the communications of presidential candidates, through the implementation of malicious codes in the American electricity and running water systems.
A Chinese agent became the driver of Senator Diana Feinstein, who chaired the House intelligence committee for years. Declassified documents have revealed that California congressman Eric Swalwell admitted to the FBI that he had had sexual relations several times with Christina Fang, a Chinese agent.
Even this October, the FBI reported the arrest of an individual in California for smuggling GPUs (electronic circuits powered by cutting-edge semiconductors) to China worth $300 million (272 million euros).
In June, a former Federal Reserve economist, John Rogers, was sentenced to 38 months in prison for falsely telling federal investigators about whether he passed confidential data to Chinese agents.
Espionage accusations and investigations can also be used as punishment or pressure tool. In the midst of the technological war between the two powers between 2018 and 2020, the US authorities accused Huawei of spying through its devices at the service of the Chinese government and subjected the company to different veto measures that have weighed down its accounts.
In December 2018, Washington held Huawei's then-chief financial officer, Meng Wanzhou, daughter of the company's founder, Ren Zhengfei, under house arrest in Canada on suspicion of fraud. Beijing responded immediately. He arrested two Canadians, diplomat on leave Michael Kovrig and businessman Michael Spavor, whom he accused of espionage in the border area with North Korea. Both were imprisoned until Beijing negotiated with Washington a guilty plea for Meng in exchange for the freedom of the executive and that of the two Canadians, nicknamed “the two Michaels”, in September 2021.
Jessica Brandt, former director of the Center for Foreign Malicious Influence in the National Intelligence Directorate, points out on the blog of the Council on Foreign Relations think tank that in the case of Nvidia Huang could be a very interesting target for Beijing for various reasons. "Information about how Nvidia designs its China-specific semiconductors could be useful in evading export controls. Information about its conversations with politicians could be useful in knowing where those controls may go in the future," he writes. “Understanding whether there are disagreements in this regard with the Government can be useful to exploit those differences of opinion.”
Huang's case is, by far, the most notorious and scandalous of alleged espionage between the two powers in recent times. So much so that the fact that the businesswoman from the Singaporean company Megaspeed belongs to the Chinese secret services or not is almost irrelevant: just the suspicion that her purchases for billions of dollars of advanced Nvidia microprocessors could be aimed at facilitating China to bypass US controls on the export of those chips already threatens to affect the bilateral relationship between the two giants, something that could have tremendous economic and geopolitical consequences.
George Chen of the University of Hong Kong remembers the hot air balloon incident. "The importance of the 2023 episode was not the balloon itself, but the way it aggravated mistrust and altered the political climate in the two capitals. The Huang affair carries a similar risk."
