The forced resignation of Nvidia CEO Jensen Huang is a mixed win for China’s Ministry of State Security, the civilian intelligence service that was able to plant an alleged spy in the bed of a world leader in cutting-edge artificial intelligence technology.
The MSS, as the service is known, has a reputation for damaging spy penetrations of the U.S. government, and appears to have successfully influenced Mr. Huang to support Beijing policies through his affair with Alice Huang (the two are not related), the alleged MSS agent at the center of the emerging scandal and a director of a tech company suspected of diverting Nvidia chips to China.
Federal and congressional investigations are exploring the case to determine if China was able to both impact American policy by loosening export controls on advanced artificial intelligence goods, which happened twice under the Trump administration, while potentially gaining important information about Mr. Huang and Nvidia.
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The loss of Mr. Huang as Nvidia chief, however, will likely diminish MSS operations aimed at influencing American policy on AI microchip export controls to China that the Chinese Communist Party has criticized as “economic containment.”
On Capitol Hill, Sen. Jack Reed, ranking member of the Senate Armed Services Committee, said Mr. Huang’s resignation is part of a major scandal and appears to stem from the Trump administration’s failure to protect national security from Chinese espionage.
“American semiconductor technology is essential to our military capabilities and our technological advantage over China,” said Mr. Reed, who is likely to be the next committee chairman in January. “Yet the Trump administration reversed course on critical export restrictions, allowing Nvidia to sell advanced AI chips to China despite clear national security risks.”
Mr. Reed said he knows of reports that advanced AI Nvidia chips were diverted through intermediaries with ties to Chinese intelligence.
Mr. Huang resigned as chief executive and member of the board of directors on Thursday following an admission on Sunday that he had an affair with the suspected agent.
Nvidia launched an independent investigation into whether Mr. Huang and the company were targeted by a foreign intelligence operation.
The company denied that national security or Nvidia secrets were compromised.
A Chinese Foreign Ministry spokesman denied China carried out a spy operation against Nvidia and called the allegations “groundless” — an indication no further statements on the issue would be forthcoming.
The AI chip giant is the United States’ leader in AI technology and its stock tumbled after the scandal’s disclosure. The company is valued at more than $4 trillion and is the second largest company in the world after Apple.
The Trump administration was divided over whether Nvidia AI chips were diverted to China through a Singapore company called Megaspeed with Commerce Secretary Howard Lutnick opposed to investigating the diversion, Axios reported.
House Foreign Affairs Committee Chairman Brian Mast told reporters on Thursday that Mr. Huang has agreed to testify and arrangements for the testimony are underway.
Rep. John Moolenaar, chairman of the House Select Committee on China, said Mr. Huang’s resignation could have been avoided.
“It is in our national interest for Nvidia and our other AI champions to succeed, but American companies should never jeopardize our nation’s security by giving Chinese companies access to their most advanced chips,” he said.
Congress must quickly pass legislation to tighten export controls on advanced technology in the pending national defense bill, he said.
President Trump disclosed earlier this week that the FBI is investigating the Huang affair amid reports that Ms. Huang’s company, Megaspeed, has purchased more than $4 billion in Nvidia chips and may have diverted some of the advanced semiconductors to China.
The president on Thursday praised Mr. Huang after the announced resignation as having done “a fantastic job” and called for former Apple CEO Tim Cook to take over for Mr. Huang at Nvidia.
Mr. Trump on several occasions in recent months has dismissed spying allegations against China saying the United States conducts similar operations.
But the scale and damage caused by MSS operations has been unprecedented.
“The Chinese intelligence storm impacting the U.S. is a secret assault on America that is without parallel since that mounted by Moscow in the 1930s and ’40s,” said Mark Kelton, former deputy CIA director for counterintelligence.
MSS operations against the United States involving both the gathering of secrets and counterintelligence operations against the CIA have been hugely successful, and include the loss of more than a dozen recruited CIA agents inside China beginning around 2010 as a result of both CIA turncoats and poor operational security.
Another strategic loss attributed to the MSS was the systematic recruitment of U.S. nuclear scientists in the 1990s that the CIA has said resulted in the loss of secrets on every deployed nuclear warhead in the American arsenal.
Today, China’s military is engaged in an unprecedented nuclear warhead and missile buildup that critics say was largely driven by stolen secrets and technology.
MSS hacking operations against the United States have been relentless and unchallenged for at least a decade.
The FBI last year issued a public statement identifying the MSS, along with the police-oriented Ministry of Public Security, for using formal and informal links to Chinese hackers and information security companies to “compromise computer networks worldwide.”
“China’s InfoSec ecosystem flourishes because China’s government agencies, including its primary intelligence service the Ministry of State Security (MSS) and its domestic police agency the Ministry of Public Security, weaponize InfoSec companies by tasking companies that advertise legitimate cybersecurity services to also use their expertise to gain unauthorized access to victim networks to collect for China’s intelligence services,” the FBI said.
A federal indictment in New York said eight Chinese cybersecurity employees had been working on behalf of 43 MSS and MPS units in 31 provinces, highlighting the scale of the activities.
MSS technical spying also scored intelligence successes. In 2024 it was disclosed by U.S. officials that Chinese hackers involved in a hacking operation known as Salt Typhoon broke into U.S. telecommunications companies and recorded the calls of senior U.S. officials, including Mr. Trump and J.D. Vance prior to their taking office as president and vice president.
The MSS also was able to access sensitive information on FBI and U.S. intelligence tasking for electronic surveillance of foreign intelligence targets – valuable data that could be used to prevent spies from being spotted or for supplying false information to influence U.S. intelligence.
FBI Director Kash Patel testified told the Senate Judiciary Committee in September that Chinese intelligence has increased spying and other illegal operations in the past 18 months.
As of September, 60 counterintelligence arrests related to China were carried out, marking what Mr. Patel said is an 88% increase in Beijing national security cases.
One of the significant China cases was the first FBI arrest and conviction of a former Google engineer Ding Linwei who was found guilty of stealing AI technology from the tech giant.
Ding was part of China’s Thousand Talents recruitment program that targeted scores of American scientists and academics for their expertise.
The MSS also has been linked to the discovery earlier this year of seven Chinese researchers in Michigan caught trying to smuggle biological material into the U.S. Five of the suspects have been deported.
Technology theft and covert acquisition by China was estimated by the first Trump administration to have cost the United States between $250 billion and $600 billion annually.
Intelligence specialists said the MSS shifted its focus for human spy recruitment several years ago from targeting ethnic Chinese Americans to all potential sources of secrets and technological information.
The FBI was not immune to MSS subversion. In 2003, the Bureau discovered that their prized recruited Chinese agent Katrina Leung who had a close relationship with then-Chinese leader Jiang Zemin was working for the MSS and supplying FBI secrets to them.
Former MSS officer Li Fengzhi, who defected to the United States, said the MSS has two main missions – keeping the CCP in power and conducting intelligence and counterintelligence against both Chinese nationals and foreigners in China and abroad.
The MSS launched a social media account on WeChat in 2023 and since then issues frequent commentaries about foreign spying threats.
MSS Director Chen Yixin stated in an article published two months ago that foreign artificial intelligence technology poses a direct threat to Chinese Communist Party rule and AI development is now a central battlefield in global competition with the U.S.
“Hostile forces” are using AI to undermine political stability and engaged in cyber-attacks and cognitive warfare, he said.
The MSS counterintelligence department is the largest within the agency and also conducts investigations of senior CCP officials.
“They are very good at what they do,” Mr. Li said.
Mr. Kelton, the former CIA counterspy, said the MSS doesn’t just rely on cybersurveillance or hacking secure networks: The agency follows the dictum of ancient Chinese strategist Sun Tzu that true understanding of an enemy is best obtained through human intelligence.
“The PRC has launched a covert assault on the United States across the full spectrum of intelligence activities,” he said. “That campaign, which has inflicted considerable damage on us, to include theft of sensitive government, trade, and industrial secrets, has featured seemingly myriad Chinese cyberattacks, principally by the People’s Liberation Army Third Department, on U.S. government and private sector organizations.”
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