Nvidia Scandal Prompts Questions of What It Means to Be a Spy

Alice Huang, the Chinese executive at the center of the Nvidia spying scandal, was believed to be using her affair with Nvidia’s founder to help China get around U.S. efforts to restrict access to advanced A.I. chips, people who have read U.S. intelligence reporting said.

But there remains much that intelligence agencies are still assessing about Ms. Huang including when she began working with China’s top spy agency, whether her cooperation was willing or coerced, how much direction Beijing gave her, and how much she relayed to officials there, the people said.

Her relationship with Jensen Huang, who stepped down as Nvidia’s chief executive on Thursday, gave her potential access to crucial information about the company’s technology, Mr. Huang’s strategic thinking and his knowledge of Washington’s debates about A.I. policy.

She also had a business interest in ensuring a flow of chips to her own company, one of a number in Southeast Asia that provided Chinese tech firms with the computing power needed to train advanced artificial intelligence models.

The aftershocks of the scandal continue to play out as President Trump prepares for a trip next week to Asia, where he is scheduled to meet with President Xi Jinping of China, who has made a top priority of catching the United States in the race for A.I. dominance.

The unknowns surrounding Ms. Huang have generated intense scrutiny of how Chinese intelligence operates, prompted questions of what it means to be a spy and given backers of Mr. Huang an opening to raise questions about the extent and nature of her role.

Mr. Trump, who has viewed Mr. Huang as an important ally in his push to maintain American superiority in A.I. as well as a key driver of the U.S. economy, has defended the former Nvidia leader. On Thursday he seemed to suggest that he was less sure than are U.S. intelligence agencies that Mr. Huang had been the target of a Chinese intelligence operation.

“The big thing is, was the woman a spy, and I don’t know if that’s been determined yet,” Mr. Trump said in an interview with Stephen A. Smith, the podcaster and sports commentator, when asked if Mr. Huang should have resigned. “But if the woman was a spy, yes. If the woman was not a spy perhaps it would be different.”

Still, the concerns in the U.S. intelligence community that Ms. Huang was spying on behalf of Beijing were taken so seriously that Mr. Trump was twice briefed on it, late last year and again this spring.

One of those briefings was by Marco Rubio, the secretary of state and national security adviser. Mr. Rubio had overseen the drafting of a memo, dated March 30, sent to a handful of Cabinet secretaries, that detailed Ms. Huang’s close relationship with the Nvidia founder and her contacts with China’s main civilian intelligence service, the Ministry of State Security.

Mr. Trump said this week that Mr. Huang had told him he did not know Ms. Huang was tied to Chinese intelligence. Ms. Huang has not responded to outreach from The New York Times.

Ms. Huang was a top executive at Megaspeed, a Singapore-based company that purchased Nvidia chips and built data centers in Southeast Asia whose customers included Alibaba, the Chinese commerce giant.

The Commerce Department launched an investigation into whether Megaspeed was helping illegally divert Nvidia chips to China, an inquiry launched well before the current scandal emerged and subsequently taken over last year by the Justice Department. Authorities in Singapore also questioned Ms. Huang last year. Her current whereabouts is unknown.

Attorney General Todd Blanche said at a news conference on Thursday that the Justice Department has a role in investigating whether advanced chips had been sold to China in violation of U.S. export controls.

“If there are chips that shouldn’t be sold it could potentially be a violation of our export laws,” Mr. Blanche said. “That could be civil, regulatory, it could also be criminal, depending on the case. And that investigation is ongoing.”

Mr. Blanche sidestepped a question about whether the Justice Department has made an assessment about the nature of Ms. Huang’s role.

Multiple people who have reviewed the underlying U.S. intelligence said that it showed that Ms. Huang was working with the Chinese intelligence agency.

People briefed on the intelligence say it appears that she was not a trained intelligence officer but rather an “asset,” someone providing information secretly to the Ministry of State Security.

Chinese espionage is complicated. There are a range of ways that Chinese business executives can conduct espionage for the Beijing government, from simply reporting what they know to taking active direction.

U.S. intelligence agencies have confidence in their information about her interactions with Chinese intelligence services, despite all that they do not know about Ms. Huang.

Current and former officials said that Chinese business executives often believe that they cannot advance their careers without being aligned with the state. Approached by the Chinese government to collect information or prod an American company for access to high-end chips, many Chinese executives might feel they have no choice but to comply.

The U.S. intelligence community has been gathering surveillance on Ms. Huang for well over a year. She was already in a close relationship with Mr. Huang when the surveillance began, people familiar with the situation said.

Determining when Ms. Huang started providing information to the Ministry of State Security is important as American intelligence tries to better understand what details she might have gathered during her affair with Mr. Huang.

Mr. Huang stepped down from Nvidia after admitting to an affair and after the company’s board began investigating his relationship with Ms. Huang. The board pushed for Mr. Huang’s resignation not just because of the spying allegations. On Wednesday, The New York Times reported Mr. Huang had conducted another affair with an executive who reported directly to him.