Two Huangs Don’t Make a Right

A suspected Chinese spy didn’t sneak past America’s chip security. She paid the toll.

Somewhere in Malaysia in late 2024 there was a data center full of boxes that nobody was ever supposed to open. A US Commerce Department official toured the place and found them stacked there, still sealed, packed with top-shelf Nvidia AI hardware. The company that owned them had maybe ten employees and had somehow bought billions of dollars of these things. You don’t buy the most valuable computer chips on Earth and leave them in the shipping crates unless they’re about to take another trip. And the only place worth taking them was the one place on the planet they were banned from going, the People’s Republic of CHINA.

That should have been the end of the story. Somebody should have pulled a fire alarm and agents should have been kicking in doors. Instead the purchases kept rolling for more than a year. Then on Thursday the most important CEO in artificial intelligence resigned in disgrace over his relationship with the woman behind that company, a woman US intelligence believes works for China’s Ministry of State Security.

Now everybody is asking the fun questions. Did Jensen Huang just pop the AI bubble with the one organ that has never once consulted the brain? Could the former king of Silicon Valley end up across a table from federal prosecutors? Is this the excuse Washington needs to make Chinese AI flat out ILLEGAL in your living room? Those are all great questions and we’ll get to every one of them. The question nobody in power wants you asking is much simpler. Why did the chips keep flowing after the government found the boxes?

I went looking for the answer and instead of a spy movie I found a tollbooth.

The Woman Who Bet She Could Summon Jensen

Her name is Huang Le. She goes by Alice Huang (no relation, as the internet has reminded everyone nine million times this week). Her résumé says she worked as a reporter for Chinese state media before becoming a private banker. If you were designing a career path for someone whose job is to get close to powerful men and move money without questions, you couldn’t draw a better one on a whiteboard.

In 2023 a Chinese gaming company spun off its Singapore arm and Alice became managing director of the newly renamed Megaspeed. By mid-2024 its Malaysian sister company was buying Nvidia gear like a teenager with his dad’s credit card at a Best Buy. By early 2026 the tab had passed four point eight billion dollars. The LinkedIn page claimed somewhere between two and ten employees. That works out to roughly half a billion bucks of hardware per person. Either Megaspeed had the most productive staff in the history of capitalism or somebody else was holding the wallet.

A short seller named Culper Research went digging this spring and found the wallet. Megaspeed’s balance sheet had swollen from tens of millions to billions in a single year on deposits nobody could identify. Its Malaysian operation had also pledged itself as collateral to a company owned by Alibaba. Culper even noticed that Alice and Jensen were uncomfortably close. The New York Times later reported that Alice once bet a group of tech guys she could get Jensen Huang to show up to their party. Jensen showed up in the leather jacket and knocked back a whiskey shot with them. Somewhere in Beijing I like to imagine a guy in a gray suit marking that down as a win.

That part of the story is just sad. A 63-year-old billionaire got played the oldest way there is, the way men have been getting played since the Old Testament. But the sex isn’t the scandal so much as the way we found out about it.

The Phone Call

What should keep you up at night is a phone call. In August 2025, with Commerce Department agents actively investigating Megaspeed, Nvidia’s top lawyer reached out to those agents directly. According to the Times he told them a senior Commerce official, Under Secretary Jeffrey Kessler, had given Nvidia permission to make contact. The agents refused to meet. Kessler told his staff to handle the case strictly by the book and the department insists he never directed anyone to share anything. Then the case got yanked away from Commerce entirely and handed to the Justice Department, a move officials described to the Times as unusual.

Let me put that in hobo terms. Imagine the cops are investigating your neighbor for running stolen catalytic converters out of his garage. In the middle of the investigation the company that made the converters calls the detectives and says hey, your boss said it’s cool if we chat. Nobody runs an investigation that way, folks, at least not one they want to end in a conviction.

Nvidia says it cut off sales to Megaspeed in June 2025. Bloomberg found Malaysian trade records showing Megaspeed imported more than 17,000 of Nvidia’s newest chips that November anyway. Bloomberg also found that Nvidia’s own count of chips sold to Megaspeed through middlemen came up about fifty thousand short. Megaspeed was still listed as an official Nvidia partner when the scandal broke. One line in that reporting I keep rereading. Nvidia told Bloomberg it asked the US government whether it should cut Megaspeed off and the government told it no.

The government said NO, the same government that found the boxes? Why on God’s green earth would Washington tell Nvidia to keep selling to a company it was already investigating? I don’t think the answer is a conspiracy so much as a business model.

Uncle Sam Wants His Cut

In 1999 Apple released the Power Mac G4, a desktop that could crank out about a billion calculations a second. The Pentagon classified it as a supercomputer and blocked its export to around fifty countries including China. That kind of number crunching helps you build nuclear weapons and the missiles that carry them. (Hello to the half dozen readers who flood my comments every time I mention nukes to inform me they’re fake, always citing the same guy who used to work at a nuclear POWER PLANT. Fellas, your star witness spent his whole career clocking in at the one building that proves atoms split.) Washington treated raw computing power like a weapon for decades. A computer you can buy at a yard sale today was once a matter of national security.

Then in the summer of 2025 Jensen Huang sat down with Donald Trump and the weapons policy turned into a sales commission. Trump told reporters he asked for 20 percent of Nvidia’s China chip revenue in exchange for export licenses and Jensen haggled him down to 15, like two guys working out the price of a riding mower at a garage sale. The Commerce Department approved the licenses two days later. By December Trump had upgraded to a more powerful chip and a bigger cut, announcing on Truth Social that 25 percent will be paid to the United States of America.

There was one small problem. The Constitution bans taxes on exports and the law that governs export licenses forbids the Commerce Department from charging fees for them. So the administration got creative. Under a January rule, chips made in Taiwan and headed for China first get shipped into the United States for testing, where they get hit with a 25 percent import tariff on the way in. It’s an export tax wearing a fake mustache. If I tried that move with my taxes I’d be filing my next return from a federal prison.

And who gets to approve the Chinese buyers? That job belongs to Kessler’s office at Commerce and it has signed off on roughly two dozen Chinese companies to buy or handle these chips, including two with empty offices. The Times found little evidence that one of them, an outfit called New Matrix, exists at all. Its owners are tied to companies connected to a Chinese investment firm on America’s own blacklist.

So picture the setup. The agency responsible for keeping advanced chips away from the Chinese military now earns money every time those chips go to China. That same agency was investigating Megaspeed and approving buyers that might be ghosts. That’s a referee with money riding on the game.

What Four Billion Dollars of Chips Actually Buys

People keep calling Megaspeed’s purchases graphics cards like this was a bunch of gamers upgrading their rigs. One of the data center chips Nvidia sells today does tens of thousands of times the math that banned G4 did. Back-of-the-napkin math puts Megaspeed’s haul at well over a hundred thousand top-tier AI chips. That’s more than Elon Musk had when he switched on his Memphis supercomputer and the press called it the most powerful AI training cluster on the planet.

That is take-over-the-world compute and I don’t mean it as a figure of speech. If you handed the Wise Wolf four billion bucks of GPUs I would not be writing to you from an extended-stay motel. I’d be running the country with a swarm of micro drones so big it would blot the sun out of the sky. My first executive order would put a GPS tracker in every Nvidia chip that leaves the country (Senator Tom Cotton has a bill to do basically that and it’s been sitting around Congress gathering dust). My second executive order would be continental breakfast that isn’t just a sad bowl of Froot Loops and a waffle iron nobody has cleaned since the Obama administration.

Now hand that same power to a regime that runs internment camps, watches a billion people through their phones and has never hidden its plan to swallow Taiwan. In January the House China committee said Nvidia hardware used by the Chinese AI lab DeepSeek ended up supporting an AI model used by the PLA. That’s the People’s Liberation Army, the actual Chinese military. There’s a reason these chips aren’t supposed to be sold to power-hungry megalomaniacal communist dictators. It isn’t because Washington cares about Beijing’s frame rates in Call of Duty.

Everybody Knew

The tollbooth explains why nobody slammed the gate but not why nobody cared who was driving through it. For that we have to go back to May.

Trump was flying to Beijing for a summit and Jensen had been left off the guest list. The president called him that morning and Jensen raced his private jet to Alaska to catch Air Force One at a refueling stop. According to the Times, right before Jensen climbed aboard, Secretary of State Marco Rubio briefed Trump on intelligence showing Nvidia’s CEO was in a relationship with a suspected Chinese spy. Trump let him on the plane anyway and flew him straight to China. Five months later, three weeks before the Times reported US intelligence had pegged Alice as an asset, Trump handed Jensen the National Medal of Science.

When the story finally exploded Trump said he believed Jensen had no idea Alice was a spy. In the same breath he confirmed the FBI was looking into it. Nvidia’s spokesman described Jensen’s interactions with her as not unusual or unexpected, a phrase that is technically accurate if you work for the Ministry of State Security. Jensen confessed the affair to his entire company last Sunday. The board swore it had full confidence in him on Monday. By Thursday morning, after the Times reported a second affair with a subordinate, that full confidence had lasted four days and Jensen was gone after 33 years at the company he built.

Meanwhile the man running the Commerce Department is having a fantastic couple of years. Forbes says Howard Lutnick’s family fortune has more than doubled since he joined the cabinet, to more than seven billion dollars, mostly thanks to his old firm Cantor Fitzgerald’s stake in the crypto company Tether. Lutnick handed Cantor to his sons when he took the job. Bloomberg reported that Tether loaned money to his family’s trust right in the middle of that handoff. Senators are investigating Cantor’s Tether ties and a separate $1.6 billion Commerce deal where Cantor collected fees. To be crystal clear, nobody has connected a single dime of that to Nvidia. It just tells you what kind of department is running the tollbooth. Democrats sent Lutnick a letter this week asking whether he or Kessler knew about the intelligence on Alice and when they knew it. He has until December 1 to answer.

Who Gets Hurt When the Gate Comes Down

You do, probably. Nvidia shares cratered as much as 14 percent at Thursday’s open before clawing back some of it. By Monday the company had already lost something like a trillion dollars of value from its October peak. Nvidia is the load-bearing wall of the entire AI economy and your 401(k) almost certainly lives in that house. Jensen walked out five days before Nvidia’s biggest earnings report of the year. The cynical read is that the board dumped him early so Tuesday’s call can be about revenue instead of romance. The paranoid read is that an awful lot of people saw this coming. Culper’s short position from May is printing money, Nvidia’s rival AMD jumped 13 percent on Monday, and Beijing got to watch America’s most valuable company eat itself on cable news without lifting a finger.

So who’s going to fix it? Within hours of the resignation Trump had a candidate. There is only one man to take his place, he posted, TIM COOK of Apple. A Legend replaces a Legend! Cook stepped down as Apple’s CEO in August but he’s still Apple’s executive chairman. The president’s dream is one guy chairing Apple while running Nvidia. That would make Tim Cook the most powerful tech lord in history. One man would control the phone in your pocket AND the chips behind every AI your phone talks to. (Sorry, Bill Gates, you were a piker.)

And then there’s the punchline. The plan for replacing a CEO brought down by his coziness with China is to hire the guy who built the most valuable gadget empire in history inside Chinese factories. That’s like firing your babysitter for smoking and hiring the Marlboro Man. Tim, buddy, I’m sure you’re a lovely person but you are not the cure for this disease.

The Tollbooth Is Still Open

What scares me is that Washington is about to do what it always does after a scandal and overcorrect in the dumbest possible direction. Right now America mostly bans Chinese AI on government devices, the same way TikTok started out before it graduated to a national ban. Congress is already moving to tighten chip rules through the defense bill. Don’t be shocked if a year from now downloading a Chinese AI model on your own laptop is a crime, while the officials who ran the tollbooth keep their jobs. They’ll punish you for using Chinese AI and never ask why their own department kept selling China the chips to build it.

Then there’s Taiwan, where Jensen was born and where Nvidia’s chips are made. Beijing calls the island a breakaway province it will take back by force if it has to. Compute is military power in this century the way oil was in the last one. Every chip that slips through shrinks the gap between their military AI and ours. The closer China gets to parity the more tempting that island full of chip factories starts to look. World War III probably doesn’t start in a Malaysian data center. If it does, though, the history books are going to open with a spy, a billionaire, a whiskey shot and a warehouse full of boxes nobody bothered to open.

China calls the spy story groundless speculation, Megaspeed denies diverting anything and Alice hasn’t been charged with a crime anywhere. Nvidia’s board says it has no reason to think company secrets walked out the door. Fine, then answer the questions. What did a woman US intelligence believes works for Chinese intelligence pick up over drinks with the most important man in AI? Why did the president let him on the plane? Why did the government tell Nvidia to keep selling? Why was Nvidia’s lawyer calling the investigators? And why does the agency guarding the gate get paid every time it opens?

Jensen, you had one job and it was not that. Still, don’t let anybody turn this into a story about one man’s zipper. Two Huangs don’t make a right and apparently what they make instead is a criminal inquiry, a trillion dollar crater, a constitutional workaround with a fake mustache and a tollbooth on the road to Beijing. No relation.

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Help Keep the Wise Wolf Howling

No foreign intelligence service has ever tried to seduce the Wise Wolf and frankly I’m insulted. Apparently a guy who rides an e-bike between extended-stay motels doesn’t rate a honey trap. That leaves you as the only people paying for this publication and Lily and I would like to keep it that way.

We’re two people with bills to pay running an independent outlet that isn’t cheap to keep online. Lily finished her journalism degree and spends her summers teaching the next generation of reporters at camp since somebody has to train the kids who’ll cover the next Megaspeed. Our dream is a newsvan so we can report from wherever the next scandal breaks instead of whatever motel has the fewest mystery stains. Every paid subscription gets that van a little closer to the parking lot.

Every time you share this article, a wolf stuck living in a seedy motel gets one step closer to not living in a seedy motel. And unlike Megaspeed, every dollar in our account comes from someone we can actually name.

Help keep the Wise Wolf howling.

Sources

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