“Everybody spies on everybody, I mean that’s just a fact,” then US senator Marco Rubio once said in what, for a politician, appeared to be a rare avowal of cold, hard realpolitik. It was his response to one of the biggest spying scandals of modern times, the 2013 release of a massive cache of documents by the whistleblower Edward Snowden which included the revelation that the US had been tapping the phone of a staunch ally, the German chancellor Angela Merkel.
It is interesting to note then that it was Rubio, now the US Secretary of State, who reportedly tried to alert his boss to another explosive espionage plot that is now making headlines around the world. This time the US was the victim. It’s easy to be blase when you’re on the side doing the spying. Less so when it’s your own national security that’s been breached.
This is a scandal that involves Nvidia – arguably the US’s most strategically valuable company – and China, undoubtedly the world’s most powerful authoritarian state. It also brings into sharp focus one of the defining questions of our time over which of those two superpowers is ultimately going to control the technology behind artificial intelligence (AI). And, like so many good spy stories, this one – in addition to the geopolitical intrigue – has high-end gadgetry and that most human and exploitable of frailties: sex.
Nvidia began life as a Silicon Valley start-up, making graphics chips for a new generation of fast-moving video games. But just as the steam-pump ushered in the age of industrialisation three centuries before, the kind of chips needed to keep gamers happy at their consoles in the early 2000s would soon open up newer and far more profound possibilities for humankind.
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The company leveraged its know how to become the dominant maker of advanced graphics processors - the single most vital piece of technology in the AI revolution - and the first in the world to hit a valuation of $5 trillion, with its CEO, Jensen Huang, achieving rockstar levels of fame.
Ask a question of an AI chatbot and the chances are an Nvidia processor is at work somewhere behind the answers it delivers. But, increasingly, the sophisticated machine learning that they enable is being integrated into government and military decision-making. On the grounds that it would be foolhardy to hand your adversary advantages in war planning, weapons design and real-time battlefield targeting, the US has banned the export of Nvidia’s most powerful chips to China.
There have long been fears, however, that China is finding ways around that export ban by setting up front companies in places that are not on the export blacklist, legally importing the chips under licence and then simply shipping them home.
Last week a New York Times investigation delivered the stunning revelation that Huang had been in a romantic relationship with Alice Huang, the Chinese boss of a Singapore-based company, Megaspeed, suspected of running just such an operation (the two share a common Chinese surname). Her company had bought $4.8 billion worth of Nvidia equipment in the space of two years and, even more troubling US intelligence agencies suspect she could be a spy working for China’s Ministry of State Security.
Soon after, Jensen Huang issued a statement admitting he’d been unfaithful to his wife. Nvidia announced that it would launch an internal investigation but did not believe its commercial secrets or US national security had been compromised. Megaspeed has dismissed what it called “incorrect insinuations” and China has dismissed the whole thing as “groundless smears and slanders”. But under intense political scrutiny and with Nvidia’s share price sliding, Huang has now stepped down.
[ Can Jensen Huang survive as Nvidia’s chief executive after spy scandal?Opens in new window ]
Everybody may well spy on everybody. But China is something of an outlier in the way it lends the full weight of the state not only to the gathering of traditional, classified information from governments but to the theft of commercial secrets from foreign companies too.
In my nine years as a reporter there, I was once detained by People’s Liberation Army soldiers who seized our camera tapes after we tried to film outside a 12-storey Shanghai building suspected of being home to a military unit of hundreds – possibly thousands – of computer hackers. The hackers were thought to have stolen many terabytes of information from western companies, including blueprints, business plans, pricing information and personal data.
US president Donald Trump rode to power on the promise of protecting American workers from that no-holds-barred approach to industrial expansion. Yet his tariff war has likely cost more jobs than it has created, his administration appears to have taken no action over the spying scandal - despite the reported intelligence warnings including from Rubio - and he has relaxed rather than strengthened the export controls on Nvidia’s technology. It was Jensen Huang himself – whom Trump describes as a friend – who successfully lobbied for the lifting of the export ban on the company’s second most powerful processor. As the questions over potential Chinese influence swirled, Huang’s statement said he loved America and was committed to supporting its national security.
For those who look at AI and see not so much its utopian promises but the threat of ever more rapid job losses and vast profiteering by private technology companies, perhaps it’s hard to see why it matters whether the US or China wins that race. In a time when the foundations of American democracy seem less than solid, it might not seem much of a choice at all. But I’m reminded of something my Chinese foreign ministry minders used to say to me when criticising my reporting, as they often did. Accusing me of having a colonial mindset, they’d suggest I had deep, preconceived notions of the West having only good intentions and of China having a propensity only for evil.
Did China send a spy to seduce tech billionaire Jensen Huang?
I’d tell them they were mistaken and that, for me, the choice was far worse. On the one hand you have the West’s own propensity for evil – if that’s what we want to call it – but with a bit of accountability thrown in by way of independent courts and a free press. And on the other, you have China’s propensity for evil with no accountability at all.
There is not the slightest chance, for example, that any similar spying story could have been broken in China. In democratic societies, we are lucky to still have journalists who can throw light into the darkest corners of the world of intelligence and hold even the most powerful of tech companies to account. Whatever kind of future AI brings, we lose that at our peril.
John Sudworth is a freelance journalist and commentator based in Ireland. He is a former China and North America correspondent with the BBC
