After ‘Honey Trap’ Allegations Ensnare Nvidia Founder, China Labels AI Data Loss Probe ‘’McCarthyism’

Nvidia’s shares were tumbling on the NASDAQ for a second day Tuesday as the AI and chipmaking firm faces a crisis over allegations its embattled founder and CEO, Jensen Huang, fell into an alleged Chinese Communist “honey trap” in the form of a woman executive from Singapore with close ties to Beijing.Mr. Huang, the CEO of America’s richest company faces an FBI investigation into whether his admitted affair with a top executive of a Singapore company named Megaspeed may have resulted in him unintentionally passing information to Beijing, an offense that could invite espionage charges. The Chinese foreign ministry has formally denied the plot while the Chinese propaganda machine is picking up on the American term “McCarthyism,” dating from the campaign waged by the Wisconsin senator, Joseph McCarthy, in the 1950s in pursuit of Communists in government and also in Hollywood.“U.S. lawmakers’ China chip push over Nvidia CEO’s personal controversy reflects McCarthyist logic, turns national security into witch hunt,” ran the headline in the English-language Global Times, published by the party newspaper People’s Daily. The director of the Institute of Regional and Country Studies at East China Normal University, Chen Hong, was quoted as accusing American politicians of attempting “to turn an unresolved personal matter into political leverage for expanding technological containment.”Born in Free Taiwan 63 years ago, Mr. Huang, the world’s seventh richest man with a fortune of $200 billion, according to Forbes, appears contrite and embarrassed by the revelation of his affair and has been publicly repentant about his infidelity with Alice Huang, a Chinese citizen of no relation. He admitted that he “was unfaithful to my wife” of 41 years after being photographed with his lover at a bar in Taiwan after a trade show. “My actions hurt her and our children,” he said. “There is no excuse for what I did. I am deeply sorry.”He has not, however, admitted to knowing a thing about Ms. Huang’s relationship with China despite suspicions of her role at the Singapore company. President Trump, talking to reporters at the White House, said he had personally “asked him about that,” and he said he had “absolutely no idea that the person in question was a spy.”“I really believe him,” Mr. Trump said, adding that the case might come up when he sees China’s President Xi Jinping next week at a gathering of the Asia-Pacific Economic Cooperation group at the Chinese city of Shenzhen.In China, the director of the International Research Institute of Global Cyberspace Governance at Fudan University, Shen Yi, was quoted as saying the story of the plot to sell Nvidia chips to China is based on “only a few photos of Asian-looking faces and Nvidia’s earlier push to relax trade restrictions on China, plus quotes from purported insiders and media speculation.” He accused “media outlets” of having “hyped a private affair into a narrative of ‘a female Chinese spy infiltrating a U.S. chip firm.'”Mr. Huang, in a statement on the Nvidia website, sought to brush off suspicions that he might have authorized shipment of chips to Singapore knowing their ultimate destination. He not only supported the investigation, he stated, professing to “ love our country and our company” but also “committed to protecting NVIDIA and supporting America’s national security.”The case, though, is only just beginning. The House Foreign Affairs Committee and Select Committee on Intelligence will ask Mr. Huang questions this week. At the same time, Nvidia’s board is conducting its own investigation and may ultimately force him to resign despite his high position and wealth.Nvidia issued a careful expression of “confidence” in Mr. Jensen and his leadership team while declaring “U.S. national and economic security” are “paramount to the interests of NVIDIA and its shareholders.” The case is also an embarrassment to Mr. Huang’s son, daughter and son-in-law, all of whom have positions in the company. By midday trading Tuesday, Nvidia was down more than 10 percent for the week.

After ‘Honey Trap’ Allegations Ensnare Nvidia Founder, China Labels AI Data Loss Probe ‘’McCarthyism’

After ‘Honey Trap’ Allegations Ensnare Nvidia Founder, China Labels AI Data Loss Probe ‘’McCarthyism’

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