For more than a year, Nvidia CEO Jensen Huang has repeated the party line about covert smuggling of his highly coveted premium chips: There’s no evidence Nvidia AI chips are being diverted to China, Huang has asserted.
But now two bombshell scandals, both allegedly running through Southeast Asia, have blasted a data-center sized hole through Huang’s credibility. The first case, in which $2.5 billion in computer servers equipped with Nvidia chips are under scrutiny, involves Super Micro, a company led by a longtime friend of Jensen Huang’s and one of Nvidia’s closest partners. More recently, a separate string of reports has revealed that Nvidia’s largest Southeast Asian customer, Megaspeed, is under U.S. investigation for chip diversion.
There is no evidence so far that the two cases are directly connected, though some industry observers have pointed to potential areas of overlap. Whether the two cases are ultimately determined to be part of a larger scheme, or completely separate incidents, the dual scandals have left Nvidia, shareholders, and its famous CEO, reeling.
On Sunday, Huang told employees in an email he had betrayed his wife and family in an extramarital affair. His confession followed reports claiming that intelligence officials believe Huang’s affair partner, Alice Huang (no relation), was recruited by China’s Ministry of State Security to purportedly report on his doings to Beijing. Alice Huang is a former executive of Megaspeed International, a Singapore company that reportedly became Nvidia’s largest chip buyer in Southeast Asia.
Alongside Huang’s admission, Nvidia’s board announced it has opened an independent investigation into whether Nvidia co-founder Huang was the target of a foreign intelligence operation but noted that board members maintain “confidence” in Huang. The board said it has no reason to believe that “either national security or Nvidia secrets were compromised.” Nvidia board members have retained acting U.S. Attorney of the Southern District of New York Joon H. Kim and his firm Wachtell, Lipton, Rosen & Katz to run point on the investigation, Nvidia announced Tuesday.
Nvidia’s GPU chips are critical components for training and running advanced AI models such as those made by OpenAI and Anthropic. The U.S. government considers the chips to be dual-use technology with potential military applications, and requires specific export licenses to sell them to countries such as China—which haven’t been granted to Nvidia’s most high-powered chips.
How things will shake out for Nvidia is evolving in real time, but it’s likely that a terse letter Sen. Elizabeth Warren (D-Mass.) sent to Nvidia in June will turn into a subpoena. That’s thanks to midterm election results that saw Democrats regain the Senate with Warren poised to chair the powerful Senate Banking Committee in January. Warren and Sen. Jim Banks (R-Ind.) called Monday for Nvidia to answer questions, and three House committee chairs have asked Huang to accede to a closed-door grilling before lawmakers November 18, the day after Nvidia is scheduled to report its third quarter financial results.
The June letter, which went to Nvidia general counsel Tim Teter and audit committee chair Brooke Seawell, sought answers from Nvidia regarding the state of its compliance program and noted that Nvidia continued to include Super Micro Computer (Supermicro) as a key partner in its network. The letter also cited Culper Research, a short seller who bet against Nvidia and published a report that alleges possible smuggling links between Supermicro, Nvidia, and Megaspeed, the company where Alice Huang was a top executive. U.S. authorities have investigated whether the billions in Nvidia hardware Megaspeed bought through Nvidia’s server partners went to Chinese firms barred from getting the chips. Megaspeed has denied wrongdoing.
Alice Huang is now the link between the CEO infidelity and coverup scandal facing Jensen Huang, the poster CEO for the AI buildout, and a question that has persistently dogged Nvidia, which is where its chips actually wind up after they’re purchased. And as far as export control compliance goes, an alleged honey trap espionage case carries a lot more public-interest tailwind than the at times byzantine regulations involved in obtaining and complying with export restrictions and licensing. Meaning, this latest revelation is unlikely to blow over as a single rogue actor or administrative export record issue.
One export-control veteran, who asked to speak anonymously because of his clients, said if he were an independent director or general counsel, he’d be looking at whether the company they oversee has a Huang honeytrap problem—and not just at the CEO level. Executives who are supposed to inspect data centers or conduct due diligence have been the targets of these types of seduction schemes going back decades.
He also nodded to the March Supermicro indictment that pointed out that a compliance auditor was “off-site enjoying entertainment paid for by” another company. It’s a fairly common tactic, he said.
Scandal One: Supermicro
Until recently, the most high-profile case of contraband Nvidia chips involved one of Nvidia’s closest partners, a company run by Huang’s longtime friend, Supermicro CEO Charles Liang. Neither Liang nor Supermicro was charged and Supermicro has said it is cooperating with authorities. Liang and Huang, who both founded their respective companies in 1993, often took the stage together at an event called Computex in Taiwan and joked back and forth during their joint keynotes.
“When we’re together, sometimes we speak Taiwanese, sometimes we speak Mandarin, and then when we disagree, we speak English,” Huang joked before an adoring crowd at Computex in 2024. (Huang was photographed with Alice Huang, his affair partner, at a Taipei cocktail bar during Computex that year.)
In March, federal prosecutors charged Supermicro co-founder Yih-Shyan “Wally” Liaw and two others with routing about $2.5 billion in servers laden with Nvidia H200 and B200 GPUs to China via a Southeast Asian front company. Supermicro was not charged and has said it was a victim of the scheme. Liaw has pleaded not guilty, although one of the three who were charged pleaded guilty last month. Liaw cofounded Supermicro with Liang and Liang’s wife, Sara Liu the same year Huang co-founded Nvidia. Neither Liang nor Liu were named in the indictment.
According to Liaw’s indictment, the elaborate scheme involved staging thousands of nonworking dummy servers in three warehouses to trick auditors. Contractors used hair dryers to soften the adhesive on serial-number labels and peel them off. That alleged scheme followed a similar playbook as one that had ensnared Supermicro in 2006, when the company pleaded guilty to illegally exporting computer equipment to Iran through a distributor in Dubai. Both routes involved selling to a neighboring country to keep the real buyer hidden.
The Liaw indictment does not accuse Nvidia of wrongdoing, but it lays out how the front company’s orders for Supermicro hardware fed into Nvidia’s chip allocation. In December 2024, Liaw allegedly asked the front company for monthly forecasts, writing that the forecasts were “the only way” to get Nvidia to promise B200 chip allocations, according to the indictment. Bloomberg later reported and Culper agreed that the front company in the alleged scheme is OBON, a Bangkok AI infrastructure firm. OBON has not been charged.
Supermicro has since disclosed that it received a grand jury subpoena from the U.S. Attorney’s Office for the Southern District of New York, subpoenas and inquiries from foreign authorities, the Securities and Exchange Commission, and the Bureau of Industry and Security. In Liaw’s case, his lawyer told the judge the documents Supermicro would give the government could be material to his defense, and his trial was pushed back from November 2026 to March 2027.
Scandal 2: Megaspeed
As details of the Megaspeed scandal emerge, Nvidia’s chips are now at the center of a second major smuggling case—this time involving one of its own customers. Megaspeed reportedly bought more than $4.8 billion worth of Nvidia’s chips during the past two years, with nearly $2 billion of the chips installed in data centers in Malaysia and Indonesia that are alleged to serve Chinese customers remotely, according to New York Times reporting.
Nvidia, in what could become a grave misstep, repeatedly assured the public that Megaspeed was credible. In October 2025, a spokesperson said Nvidia had visited Megaspeed operations and found no evidence of chip diversion. Last month, as reports about suspected Chinese spying emerged, Nvidia said the diversion allegations against Megaspeed had been “thoroughly investigated and debunked.” Jensen Huang, in a statement that has depreciated faster than an older-generation GPU, told Bloomberg his interactions with Alice Huang were “completely normal and not unusual.”
In May, Culper Research, which has shorted Nvidia, argued there were connections between the Supermicro indictment, alleged Nvidia chip smuggling, and Megaspeed. Culper wrote that Megaspeed’s website once listed Supermicro as a partner alongside Nvidia, Intel, and Gigabyte. The web entry was removed, but it still sits in the site code, Culper found. In addition, the report called the reported Supermicro-OBON smuggling route one of many that Nvidia chips travel before they get to China.
Huang next faces analysts on Nov. 17, when Nvidia reports third quarter earnings. The following day, House lawmakers have asked for a closed-door briefing. And in January, Warren is expected to wield the subpoena power of the Banking Committee and get the answers she originally sought back in June.
This story was originally featured on Fortune.com
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