A New York Times report on a Singaporean cloud company tied to Nvidia has put U.S. chip export controls back in focus. Nvidia says its dealings with the company were routine, and experts told MarketWatch the rules largely miss computing power rented over the cloud.
A New York Times story published Thursday alleged that U.S. authorities were concerned about a Chinese spy plot targeting Nvidia CEO Jensen Huang. The report said U.S. intelligence was surveilling Alice Huang, also known as Huang Le, for being a Chinese intelligence asset while she led Megaspeed, a Singaporean cloud-computing company.
Megaspeed has been the subject of published reports for several months about alleged contravention of U.S. export controls involving the highest-powered Nvidia chips.
Nvidia calls the ties routine
An Nvidia spokesperson told MarketWatch that Megaspeed has been no different than many other regional cloud customers and that the executives' interactions are not unusual or unexpected. The spokesperson added that the diversion allegations were thoroughly investigated and debunked last year.
Huang told Bloomberg on Thursday that Nvidia verified Megaspeed has not sent its AI chips to China, which would violate U.S. trade restrictions. He also said Alice Huang is no longer at Megaspeed.
Sen. Elizabeth Warren, however, said Huang and Nvidia's board owe Congress answers over the New York Times findings. Lizzi Lee, a fellow at the Asia Society Policy Institute, said there is no evidence so far that Huang intentionally passed sensitive information to China.
Export rules largely miss the cloud
Lee said the situation shows issues with U.S. export controls, because China does not necessarily need Nvidia's physical chips to access their computing power. Chinese companies can obtain Nvidia's compute capacity through Southeast Asian data centers under legal commercial arrangements. As the supply chain grows more complex, Lee said, "enforcement becomes much harder than monitoring what crosses China's borders".
Cheng-chi Chang of New York University School of Law's U.S.-Asia Law Institute said current rules largely do not reach computing power rented over the cloud. He said Megaspeed has reportedly continued buying Nvidia products this year, sometimes using intermediaries, and that the purchases will likely invite questions over how Nvidia vets customers.
Earlier this year, federal prosecutors charged a Super Micro Computer co-founder and two other individuals with conspiring to bring restricted Nvidia chips into China. The Justice Department never alleged that Nvidia was involved, and co-founder Wally Liaw has pleaded not guilty.
Source: MarketWatch
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