Nvidia CEO Resigns as Spying Scandal Shows China Intends to Win the AI Chip War

Nvidia CEO Jensen Huang resigned Thursday after his extramarital affair raised national security concerns. The company named Colette Kress, the current executive vice president and CFO, as interim CEO.

It comes as Congress is demanding answers from Huang about what sensitive Nvidia technology could now be in Chinese hands because of his affair with a woman believed to be a Chinese spy.  

Lawmakers want a closed-door congressional briefing with the tech titan next week.

Rep. Brian Mast (R-FL), Chair of the House Foreign Affairs Committee, told ABC he wants to know, "What quantities went to different places? What vetting they did? What correspondence he had with the Chinese government specifically? Layer that upon this potential spy out there. A number of things."

The woman, Alice Huang, also known as Huang Le, is a former executive at Megaspeed, a Singapore import-export firm building Nvidia-based data centers in Malaysia. 

Megaspeed denies accusations that it shipped advanced Nvidia computer chips into China last year. 

China's Foreign Ministry has dismissed the spying allegations, calling them a smear campaign.

The case puts a brighter spotlight on the AI race, which China has been losing badly, and has been using commercial espionage to catch up.

Chris Mattmann, Chief Data and A.I. Officer at UCLA  said, "AI chips have been at the heart of policy in the Biden administration and at the heart of the Trump administration... because they control basically who gets to train the most sophisticated AI models and who gets to lead the AI race."

Right now the U.S. leads by a mile because it controls nearly 75% of global AI capacity and is estimated to have 30 to 40 times more computing power than China, prompting Beijing to go after U.S. chip technology anyway it can. 

The Center for Strategic and International Studies, which tracks Chinese espionage efforts, has recorded 224 instances directed at the United States since 2000, with over half being attempts to steal commercial technology.

Retired Air Force General Rob Spalding, CEO of tech company SEMPRE and a Senior Fellow at the Hudson Institute, says for years the U.S. has been like a candy store for the Chinese to plunder.

Spalding says China has "a comprehensive strategy to undermine the West using the openness of the West as the chief vulnerability. So we are absolutely unprepared for this."

There are reports President Trump knew about the Huang relationship. He says he didn't. 

Congress wants to now further tighten regulations on chip exports; however, Spalding says the laws have already been in place.

"The Commerce Department should have been restricting this instead of their letting it go. When profit is the motive for an American company, they're more likely than not, if they can get away with it, doing what the Chinese want because it essentially affects the bottom line of their company," he said.

President Trump has said, "Whoever wins the A.I.race, wins." China is clearly playing to win.