Let's be clear, again: Huang has admitted an affair with a woman who was an executive at a company that bought billions of dollars of Nvidia chips that may have been smuggled to China, and it turns out she was allegedly a Chinese spy. Her apparent mission: gather intelligence and influence Huang, who has a close relationship with the US president, to lobby for relaxed chip exports to China. Which is what he has been doing.
Huang admitted the affair in an email to company employees, and the Nvidia board of directors has launched an investigation.
By any reasonable definition, the business is clearly affected.
So you going from the other country being fully dependent upon you (putting you at an economic/geopolitical edge) to urgently incentivizing them to make their own advances in the restricted industry, which may eventually surpass your own achievements. For instance the Wolf Amendment [1] is the reason China was never allowed on the 'international' ISS. [1] The idea is that they'd just steal all of our tech or something. So it simply led to the Chinese creating their own space station while the ISS continues to deteriorate with no replacement in sight.
Same thing with chips. Come back to this post in ~15 years.
You're missing the point, which is that once you've been compromised by a foreign intelligence service, it doesn't matter whether or not what you were lobbying for was logical or "right". What matters is that your relevant actions have been tainted and motivations can no longer be fully trusted, so you lose your credibility.
Nvidia's board is probably going to try to do what it can to look like it's taking this matter seriously without terminating Huang, but that's because there's no succession plan at Nvidia.
Huang's political clout is gone, and he may never get it back.
He has lost all credibility. He might remain as CEO of Nvidia, especially because the company doesn't have a succession plan, but this is going to be the end of his political cloud for a good long time, perhaps forever.
> ...which would also mean it was likely a bad play by China.
I don't really think this is the case. China will continue to smuggle chips and work on its own technology regardless.
The bottom line is China's MSS successfully compromised one of the world's most powerful executives and the price that will be paid is mostly on the US side. Given that this was disclosed to Trump a while back and he sat on it, don't be surprised if this becomes another big problem for Trump, who is in a horribly vulnerable spot right now after the midterms.
I don't agree this will harm the US in any way, shape, or fashion. It'll be used to justify even more stringent efforts at tech control and greater surveillance efforts of key technological players. All of this fits into US desires to a t. And while none of this will directly harm China, and may even paradoxically benefit them (for reasons mentioned previously), I can't imagine this is something they would directly aim for relative to a more favorable prior status quo.
Putting aside how strategically important Nvidia is as a company, and the access and influence Huang has on policymakers including the president of the US, he had an affair with an executive at a customer that has purchased billions of dollars of Nvidia chips and may have been smuggling them to China.
The minute you mix your infidelity with the business you run, it's no longer "personal".
> I don't agree this will harm the US in any way, shape, or fashion. It'll be used to justify even more stringent efforts at tech control and greater surveillance efforts of key technological players.
No country is a monolith. The US isn't. China isn't. This is a real mess for the Trump administration and his allies/sycophants, ammunition for Democrats, a potential boon for China hawks, a setback for China doves, etc.
As for "even more stringent efforts at tech control and greater surveillance efforts of key technological players", I don't think this is a simple subject but let's be honest: the oversize influence and power of tech companies today is probably something that does need oversight and regulation. Nothing about the billionaires running these companies suggests they are interested in what's best for average working-class Americans.
> ...I can't imagine this is something they would directly aim for relative to a more favorable prior status quo.
As I stated, China will continue to smuggle Nvidia chips and work on its own technology. This won't affect that. This woman is not the only honeypot in corporate America (or Washington DC) and the Chinese espionage apparatus is very well established and won't be dismantled by this one discovery.
As for the status quo, what status quo are you referring to? The one where China was under peak effective bilateral tariffs of ~150%?
China is biding its time and preparing for conflict, which it knows could very well be kinetic. It has been working very hard to sanctions-proof its supply chain and, more importantly, financial system. It is expanding its nuclear arsenal at the fastest rate globally. And so on.
The status quo I'm referring to is the one China continues to rapidly outpace the US by most of every imaginable metric and the US' growth is not only stuttering but continues to face growing internal (and external) issues. China has absolutely zero reason to rock the boat and has historically always played the long game.
This isn't some hypothetical situation. The woman Huang admitted having an affair with was an executive at a data center company that bought billions of dollars of Nvidia chips and is suspected of having smuggled them to China.
She was allegedly recruited by China's Ministry of State Security to not only gather intelligence from Huang but to try to influence him to lobby for relaxed chip exports to China. We don't know how "influential" she was but pushing for less stringent export controls on Nvidia's chips is exactly what Huang has been doing.