As someone who's been watching the Chinese speaking twitterati about this, none of this really makes sense. MSS had an interest in shutting down Nvidia smuggling in blackwell's and h100's for Alibaba's use, in the interest of protecting homegrown chips. And the purported "spy" was working for Megaspeed, which was part of the convoluted web of shell companies that Nvidia worked in lockstep with to avoid sanctions from both sides. Even more so, this story was first broken more than 6 months ago, but is only coming out now after the midterms. There's a lot of speculation that DPP is involved, particularly as they seem to be the ones feeding Marco Rubio the claims that she's even a spy.

There's no way that Nvidia pulled off the smuggling of chips for so long without US knowing and condoning, but this timing is weird.