Donald Trump gets caught up in the Nvidia spy scandal

Huang has not only led the world’s most important and valuable chip company, which he co-founded, since 1993, he is also considered one of the Silicon Valley bosses with a particularly close connection to the world Chief in the White House.

The US President meets in a week China’s head of state Xi Jinping in the southern Chinese metropolis of Shenzhen on the sidelines of the APEC summit. At the same time, Jensen Huang has to answer questions in the US Congress. Democratic and Republican lawmakers have expressed “significant national security concerns.”

The affair has become a test of endurance – for investors who are already joining together in class action lawsuits, the chip company itself and the entire AI industry. One observer wrote online: “If the AI ​​bubble bursts because of a honey trap, this would be it stupidest economic crash in history.” Very different levels are affected:

Many billions wasted

Even though Nvidia shares recovered from their massive losses the day before on Wednesday, a combined market value of $470 billion was destroyed on Monday and Tuesday alone. Long the most valuable company in the world with a value of five trillion US dollars, Nvidia has now slipped to third place behind Apple and Microsoft. CEO Jensen Huang, who was the eighth richest person in the world on Monday with a fortune of $160 billion, was “only” worth $146 billion on Tuesday evening and had slipped to twelfth place in the Forbes ranking. In the USA, the debate is in full swing as to whether the Nvidia boss can still be retained – although there is no clear succession plan.

AI under pressure

Even before the scandal, the AI ​​world and with it the flagship Nvidia were under enormous pressure. Reason: The Democrats want to regulate AI more closely and after their landslide victory in the midterms there was a real crash in chip and tech stocks. One of the many indirect consequences: Anthropic’s valuation – shortly before the Claude developer’s IPO – fell massively from two trillion dollars to a maximum of 1.5 trillion. Huang’s possible replacement could trigger another industry earthquake or calm the situation – that is an open question.

Trump in need of explanation

The US President expects Xi Jinping to address the Nvidia affair at their meeting in Shenzhen. The accusation of espionage against one of the most important US managers is serious. Beijing denies the accusation and calls it “defamation”. The recent thaw between the superpowers is likely to turn into a new ice age.

At home, Trump has to ask himself why he hasn’t taken action on the matter long ago, even though, according to the US media, he was first warned about a year ago. Not only did Trump publicly defend Huang after his adultery confession. The CEO traveled with Trump on Air Force One to Beijing in May for a state visit and attended a state banquet for Xi at the White House in September. As the Los Angeles Times reports, high-ranking intelligence officials have now informed leading members of Congress (“Gang of Eight”) about a national security crisis related to Nvidia.

US chips to China

In addition to the accusation of espionage against Alice Huang, there is the suspicion that state-of-the-art Nvidia chips worth several billion dollars illegally made their way to China. According to the New York Times, Nvidia may have tried to intervene in a US Department of Commerce investigation into Megaspeed in Singapore. Alice Huang was in a management position at the company. Among other things, chips are likely to have been smuggled to China via Megaspeed. Jensen Huang has been one of the most vocal critics of US export controls. In 2025, the top executive managed to persuade Trump to ease export bans on some of Nvidia’s most advanced chips.