Beijing has issued a fresh warning to Washington against tightening semiconductor export controls, just as reports emerged that a company connected to the Nvidia scandal managed to obtain restricted AI chips. The development adds another layer of friction to an already tense technology relationship between the world's two largest economies.
According to a report by Bloomberg News on Friday, Shanghai Longteng Intelligent Computing, a firm founded by Alice Huang—a former executive at Singapore-based data centre operator Megaspeed—ended up with servers containing Nvidia's H800 chips. The servers were reportedly purchased from Dell Technologies by Aperia Cloud Services, an official Nvidia partner in Singapore, before somehow reaching the Chinese company. It remains unclear how Shanghai Longteng acquired them or whether Huang was directly involved. Washington banned exports of the H800 to China in 2023.
The revelation comes at a delicate moment. Nvidia co-founder Jensen Huang resigned on Thursday, admitting to extramarital affairs, including one with Alice Huang (no relation). A US intelligence memo circulated this spring allegedly identified her as an asset of China's Ministry of State Security. Reports also suggest that the Commerce Department under Howard Lutnick may have failed to act on suspicions that Megaspeed was rerouting restricted Nvidia technology to China.
Beijing has denied that Alice Huang is a spy, calling the allegations a pretext for a “technological blockade.” Foreign ministry spokeswoman Mao Ning said on Friday that China opposed “the abuse of export control measures.”
Congress pushes for tighter limits
The controversy is fuelling calls in Washington for stricter export policies. House Speaker Mike Johnson was quoted as saying, “I'm in favour of limiting those exports,” adding that there was a “developing consensus in Congress.” Such sentiment could lead to new legislative measures targeting China's access to advanced semiconductors.
Megaspeed said it was investigating whether it had complied with export controls, while Malaysia is probing one of its subsidiaries over the possible diversion of advanced AI chips. These investigations underscore the growing scrutiny of supply chains that move sensitive technology across borders.
The row threatens to overshadow next week's expected meeting between US President Donald Trump and Chinese leader Xi Jinping at an APEC summit in Shenzhen, China. Trade and technology issues are likely to dominate the agenda, with chip controls being a key sticking point.
For Europe, the dispute has significant implications. The EU has been developing its own semiconductor strategy, aiming to reduce dependence on both the US and China. The bloc's recent warning about AI-driven cyber threats highlights the security dimension of these technologies. Moreover, European companies that supply equipment or materials to the semiconductor industry could be caught in the crossfire of US-China export controls.
As the US and China escalate their technological rivalry, Europe is increasingly being forced to navigate a delicate balance. The EU's own push for strategic autonomy in tech, including its first AI summit in Dublin, reflects a desire to avoid being collateral damage in a superpower contest.
Meanwhile, China's trade surplus has topped $1 trillion, driven partly by surging AI exports, as noted in a recent analysis. This economic leverage gives Beijing confidence to push back against US restrictions, even as it faces internal challenges in developing its own advanced chips.
The coming days will reveal whether the Trump-Xi meeting can ease tensions or whether the chip war will intensify further. For now, the H800 affair serves as a reminder of how porous export controls can be, and how difficult it is to fully sever the global technology supply chain.
