China’s Intelligence Coup in the AI War
· The Atlantic
Jensen Huang is the kind of target that spies dream about. Intelligence agencies work for years to develop a spy who can get so close to such a powerful man. That the Nvidia CEO is also friends with Donald Trump makes him even more valuable. Viewed one way, the Huang operation is painfully simple: It demonstrated the power of human-intelligence gathering and the weakness of the male ego, one Western official told me, somewhat admiringly.
Much remains unknown about how China’s Ministry of State Security might have enlisted Alice Huang (no relation), who was having an extramarital affair with the tech titan, or what information she might have provided. Chinese officials have dismissed the U.S. allegations that she is an MSS asset as baseless smears, and U.S. officials have not presented the evidence they believe shows her affiliation. But experts on China’s intelligence tactics told me that she was probably not a trained operative who set out to entrap the Nvidia boss. More likely, they said, the MSS learned she was having an affair with Huang and then recruited her. Under China’s National Intelligence Law, citizens are required to assist the MSS when asked. And the agency doesn’t always ask nicely. MSS officers are known to coerce potential assets by threatening to seize their property or harassing their family members, former officials told me.
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For more than four decades, China has relentlessly stolen U.S. secrets—in cyberspace, outer space, and in the flesh. China’s hackers tend to get the most attention because they have penetrated countless computer networks, vacuuming up commercial and official secrets and laying the groundwork to potentially cripple communications systems in the event of a war with the United States. But China’s spymasters have also created an extensive human network, recruiting business executives, university professors, students, and even an educator in California who later became mayor. “China is going after technology and innovation as part of a national strategy to develop their economy and strengthen their national security,” David Cohen, the former deputy director of the CIA, told me.
Beijing is acutely focused on AI as it navigates its rivalry with the U.S., one that has led American military planners to warn about the outbreak of a potential war. China’s president, Xi Jinping, has called for “an explosion of original and disruptive innovations” in AI and other fields, including quantum computing and biotech.
If a case officer were to make a list of who has the most influence over the development of AI and the rules governing it, Huang would have been at the top—at least until this week. “He’s not a surprising target,” Connor Forman, a former China analyst at the CIA, told me. “He has insight into the company and U.S. policy aims, needs, and goals. He’s of tremendous value to a nation-state, beyond chips.” The MSS would presumably have been looking for any avenue it could find into Huang’s world. Alice Huang “may have just been the right person in the right place at the right time” to provide the access that the MSS wanted, Forman said.
“I’m not at all surprised by it. This is what China does,” Alan Kohler, the former head of counterintelligence for the FBI, told me. “Someone hit a home run here, because the target was Jensen Huang. But China is also likely targeting dozens of low-level engineers that no one has ever heard of at Nvidia and other tech companies.”
Alice Huang was reportedly running a company called Megaspeed that rented computer processing power to companies in China. Chinese authorities could conceivably have threatened her business or, conversely, have offered to help her if she assisted them by spying on Jensen Huang and people in his orbit. U.S. and Chinese intelligence agencies wield very different tools. CIA officers don’t threaten Americans into cooperating or use honey traps—despite what paperback spy thrillers and Hollywood blockbusters might portray.
Chinese espionage in the United States is pervasive, current and former officials told me. But ex-CIA officers also described their tradecraft as “horrible” and “clumsy,” particularly in cyber operations.
After Xi became president in 2013, he reoriented Chinese intelligence to serve the country’s long-term strategic goals and put a stop to espionage by members of the military for their personal gain, according to a report by the Center for Strategic and International Studies. The think tank conducted a survey of publicly reported spying incidents from 2000 to 2023 and found that intelligence activity has increased significantly in the years after Xi came to power. Computer hacking was “China’s preferred mode” of clandestinely gathering information.
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In 2015, the scale of China’s cyberspying on U.S. companies became so intolerable that Barack Obama and Xi agreed that their countries would refrain from spying on each other’s companies for commercial advantage. It was a one-sided deal, because the United States already had an official prohibition against economic espionage—stealing foreign corporate secrets for the benefit of American companies. Only a year later, though, China was back to its rampant computer hacking, current and former officials have told me.
But China hasn’t limited itself to hacking; it also uses traditional methods such as recruiting agents. The country’s intelligence apparatus often blurs the line between civilian and military worlds. Nearly half of all incidents that CSIS examined involved Chinese military or government employees. But 41 percent involved private citizens.
“China uses what they call ‘nontraditional collectors,’” such as students and businesspeople, Anna Puglisi, a former U.S. national counterintelligence officer for East Asia, told me. “They view their diaspora worldwide as potential resources.” Only about 10 percent of the operations tracked by CSIS involved non-Chinese actors, usually U.S. persons recruited by Chinese officials. By contrast, the CIA works overseas to recruit foreigners to spy on its behalf.
China and the United States are in an all-out AI race, and the Huang affair may be an example of the no-holds-barred approach the country takes to accessing AI chips and technology from the U.S. But winning doesn’t necessarily mean that China will be the first nation to develop artificial superintelligence or the most sophisticated models. “It means that China incorporates this technology better and more effectively than the U.S. can,” Forman, the former CIA analyst, told me. For example, AI could help China’s military make decisions faster on the battlefield, which has historically been a weak spot compared with the United States, Forman said.
To build better AI systems, China needs the best chips. “Chinese AI chip capability still lags behind the United States,” Harry Krejsa, the director of studies at the Carnegie Mellon Institute for Strategy and Technology, told me. Eventually, China would like to produce its own cutting-edge chips, but in the meantime, he said, it has to obtain that technology through other means, including espionage or smuggling.
Krejsa, who worked on technology and security issues at the White House and in the Pentagon, said he views the Jensen Huang incident as further evidence of how hard China is working to gain advantage. “I caution against seeing this as some game of 3-D chess, as opposed to a world-class intelligence service being opportunistic any chance it gets,” he said. “Any intelligence organization worth its salt is trying to get close to people” like Huang.
Alice Huang may have helped China in other ways. At the same time U.S. officials suspect she was working with the MSS, Megaspeed, the Singapore-based company where Huang was an executive, had been under investigation by the Commerce Department for suspicion of shipping Nvidia chips to China in violation of U.S. export rules, former officials told me. Officials who run those kinds of investigations have regular access to relevant reporting from the intelligence community, but it’s not clear whether they knew about Huang’s suspected MSS affiliation.
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Trump reportedly was warned twice—the first time in 2025—that the U.S. believed Jensen Huang was having an affair with a suspected MSS asset, but he gave no instructions to notify the Nvidia chief and took no obvious actions to disrupt China’s spying. The New York Times reported last month that Huang was the suspected target of China’s spies. “If the U.S. government knew about this relationship for over a year, that sounds very long to let this play out without an intervention of some sort,” said Kohler, the former FBI counterintelligence chief, who now runs Pamir Consulting, which advises U.S. companies on Chinese influence. Former officials told me it was possible that the U.S. intelligence community wanted to continue monitoring Alice Huang, her company, and her contacts in the MSS. But that could have put Jensen Huang, Nvidia, and valuable U.S. technology at risk.
That wasn’t the only oddity in the administration’s approach to Nvidia. Not long after Trump was first informed about the affair, the U.S. government agreed to allow the sale of some Nvidia chips to China, in exchange for a 25 percent tariff on the transaction. That arrangement, which had no precedent, reversed the administration’s existing policy and ran counter to a long-standing strategy of keeping advanced AI chips out of China. Critics said the administration was helping China get ahead in the AI race, the opposite of what it purported to want. The White House countered that making China more dependent on American chips was smart policy and would keep the U.S. in the lead. But if the president knew that Nvidia might have had a spy in its midst, why was he helping the company do more business in China? The new Democratic majority in Congress will certainly want answers to that question and the many others that remain in the Huang affair.