Tokyo (AFP) - Nvidia chief executive Jensen Huang has admitted having an extramarital affair, allegedly with a Chinese executive at a Singapore company the United States suspects of trafficking artificial intelligence microchips to China.

First modification: 11/10/2026 - 10:36 Last modification: 11/10/2026 - 10:53

The scandal highlighted how China, an AI powerhouse, obtains the most advanced chips despite US restrictions on their export.

Why are Nvidia chips important?

Nvidia designs advanced components originally created for 3D video game graphics, called Graphics Processing Units (GPU).

Such units are capable of processing enormous volumes of data, which is why they are also used on a large scale to train and operate AI.

The launch of ChatGPT in 2022 revealed the potential of AI, and sparked a rush of investments in the sector.

With the explosion of chip orders, Nvidia's market capitalization skyrocketed to $4.5 trillion. It is the most valued company in the world along with Apple.

What chips are restricted?

Washington prohibits the export of high-end "Blackwell" and "Rubin" processors to China, citing security reasons, as advanced AI has military applications.

This policy also allows the United States to maintain global leadership in the sector.

Huang seeks that the United States allow Nvidia to sell chips to China and warns that the restrictions encourage the development of competitive local alternatives.

Washington this year eased controls on Nvidia H200 chips, which were previously banned and less powerful. The United States reserves 25% of the sale.

But U.S. conditions have made it difficult to approve shipments. And for its part, China has been reluctant to acquire them due to the boost of its local industry.

How does China get its chips?

Recent launches of high-performance models by Chinese startups such as Moonshot AI, Z.ai and DeepSeek are increasing pressure on their American rivals.

"Chinese suppliers still use Nvidia's latest generation chips to train their models" despite the controls, Omdia analyst Lian Jye Su told AFP.

Chips can be smuggled into the country or through a loophole that allows Chinese companies to rent processing capacity in data centers located in third countries, often in Southeast Asia.

"US controls restrict where a chip is exported, not who uses it," explained Stephen Wu, founder of the Carthage Capital investment fund.

That means Nvidia GPUs can be found, for example, in Malaysia, but used by a customer connected from China "in full compliance with the rules," Wu told AFP.

White House adviser Michael Kratsios recently indicated that Moonshot AI had accessed high-end Nvidia chips in Thailand.

Washington also accuses Chinese AI labs of training their systems to emulate the capabilities of American models.

And then there is the issue of smuggling.

The technology media The Information published in December that DeepSeek had developed its new model using thousands of chips dismantled abroad and taken to China.

DeepSeek did not then respond to queries on the issue. Nvidia told The Information that they had seen no evidence of such smuggling, which "seems implausible."

And the Chinese chips?

"Nvidia chips make high-level AI work faster and easier, but they are not the only option," said Poe Zhao, founder of the analysis publication Hello China Tech.

"The big unknown is the cost," because "training models with Chinese chips usually takes more time and more engineering work."

Huawei is Nvidia's main Chinese competitor, although it lags behind the American giant. Even so, press reports indicate that DeepSeek will train its next AI model with Huawei chips.

"Chinese-made chips are improving rapidly," Su said, and more collaborations could happen.

Huawei said in September that its next-generation AI chip would be ready in the first quarter of 2027, three quarters ahead of schedule.

To increase the power of Chinese-made chips, AI companies need to use them more, Wu said.

"They pay for it in energy consumption and costs, which they can afford because electricity is cheap in China and chips are subsidized by the state," he added.

© 2026 AFP

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