The Nvidia affair isn’t a tabloid story. It’s economic warfare espionage, and it proves we are already at war.
In June 2024, Nvidia CEO Jensen Huang was photographed at a party in Taipei, celebrating the artificial intelligence boom with some of his company’s most important Asian customers. Seated beside him was a woman named Alice Huang (also known as Huang Le; no relation), an executive at a Singapore data-center company called Megaspeed.
On October 29, The New York Times reported that U.S. intelligence agencies had concluded she was passing information to Beijing. A week later, the Times went further: U.S. officials believe she was recruited by China’s Ministry of State Security, Beijing’s top spy agency, and that her assignment included pushing Huang to advocate for looser chip export controls.
Read that last part again. The goal wasn’t only to steal secrets. It was to shape American policy through the most influential executive in the most strategically important company in the world.
That is not a business scandal. That is economic warfare espionage.
First, the Facts and the Caveats
I’ve spent nearly two decades telling people to verify everything for themselves, so let’s be precise about what is known and what isn’t.
- The intelligence conclusions come from anonymous sources briefed on U.S. surveillance. Neither Alice Huang nor Megaspeed has been charged.
- According to the Times, U.S. officials do not believe Jensen Huang knew about her intelligence activities, and he never received a defensive briefing.
- Nvidia says the contact was routine, that customers like Megaspeed receive only ordinary business information, and that nothing relevant to national security was shared.
- China dismissed the report as “groundless speculation.”
Here is what is also on the record. The Times reported that President Trump was told of the findings roughly a year ago and chose not to act, out of caution about disrupting Nvidia’s sales. And on November 4, three House Republican chairmen (Brian Mast of Foreign Affairs, John Moolenaar of the Select Committee on the CCP, and Rick Crawford of Intelligence) asked Huang to appear at a closed-door briefing on November 18, the day after Nvidia reports earnings, to explain his contacts and his company’s defenses against espionage.
Whether or not every detail holds up, the pattern is unmistakable. And it is exactly the pattern I have been warning about since 2008.
Why Nvidia Chips Are the Crown Jewels
Nvidia’s graphics processors are the engines that train and run modern AI. Every major AI model, every hyperscale data center, every serious AI research lab depends on them. That is why Nvidia became the first company in history to pass $5 trillion in market value.
But the reason Beijing wants these chips has little to do with chatbots. AI is now the backbone of military power: intelligence analysis, autonomous drones and vehicles, cyber offense and defense, missile and weapons design, codebreaking, and surveillance of entire populations. China has openly declared its goal to lead the world in AI by 2030, and under its doctrine of military-civil fusion, there is no wall between a Chinese company’s data center and the People’s Liberation Army.
Computing power is the oil of the 21st century. Whoever controls it controls the economy, and increasingly, the battlefield. That is why Washington began blocking Nvidia’s most advanced chips from China in 2022, even though Nvidia once held around 95% of China’s market for AI accelerators.
And that is why China has spent the years since trying every way around the wall.
Not One Spy. A Campaign.
The Megaspeed story didn’t begin last month. In October 2025, the Times published “A Mystery C.E.O. and Billions in Sales: Is China Buying Banned Nvidia Chips?” It reported that Megaspeed had spun out in 2023 from 7Road, a Chinese gaming company with state-backed investors; that it was poised to buy some $2 billion in Nvidia technology; that Commerce Department officials found Nvidia equipment still sitting in boxes at its Malaysian site; and that Singapore police were investigating the company. Reporters who visited its Singapore office found two employees.
Meanwhile, federal prosecutors have been busy:
- March 2026: A co-founder of Super Micro Computer was charged with diverting $2.5 billion in Nvidia-powered servers to China, allegedly using non-working “dummy” servers to fool auditors.
- October 2026: A California businessman was charged with smuggling servers containing $300 million in Nvidia chips to China.
- Operation Gatekeeper: A Houston-centered ring allegedly moved or tried to move at least $160 million in Nvidia H100 and H200 chips using shell companies, falsified paperwork, and fake labels.
Smuggling, front companies, transshipment through Singapore and Malaysia, and now, allegedly, a recruited intelligence asset seated next to the CEO. Every tool is being used at once. This is what a coordinated economic attack looks like.
Unrestricted Warfare Was a Warning, Not a Secret
In 1999, two colonels in the People’s Liberation Army published Unrestricted Warfare. Their thesis was simple: a weaker China could defeat a stronger America not on the battlefield, but through finance, trade, technology, law, and influence. In other words, by turning our own markets into weapons. As I explain in this Thursday’s Economic War Room, AI is the perfect weapon for unrestricted warfare, and advanced chips are its ammunition.
After the 2008 financial crisis, I was asked to study whether an economic attack had played a role in our collapse. My 2009 report for the Pentagon, Economic Warfare: Risks and Responses, and later my book Secret Weapon, laid out the vulnerabilities: our adversaries understood that open markets, short-term profit motives, and a political class that equates stock prices with national strength could be exploited.
Many dismissed those warnings as alarmist. Look at the headlines today. Our adversary is reportedly placing an intelligence asset beside the CEO of America’s most valuable company, with the goal of having him lobby our own government on their behalf. That isn’t alarmism. That’s the battle map.
The Red Horse and the Yellow Horse
In my new book, The Four Horsemen of the American Apocalypse and Our Six Trials by Fire, I describe four forces riding against America. The Nvidia affair shows two of them riding side by side.
The Red Horse is Communism, the Chinese Communist Party. As I explain in the book, the Red Horse was turned loose on our economy after August 15, 1971, when we abandoned sound money, and Nixon sat down with Mao in Beijing just six months later. For fifty years, we fed the Red Horse our capital, our factories, and our technology on the theory that trade would make China more like us. Instead, China used our openness to build the very capabilities it now aims back at us. Stealing and smuggling AI chips is simply the latest chapter, and perhaps the most dangerous, because AI multiplies every other form of power.
The Yellow Horse is the one inside our own walls: the cowards, traitors, and fools. I want to be careful here. No one has accused Jensen Huang of knowingly helping China, and U.S. officials reportedly believe he didn’t know. But the Yellow Horse isn’t only about bad people. It’s about a culture that puts quarterly profits ahead of national security, and about leaders who hesitate to act when acting might rattle the market.
Consider the Times’ report that the White House held back in part because Nvidia’s sales may be driving the economy and the stock market. Whatever the full story, that is precisely the leverage economic warfare is designed to create. When one company becomes so large that protecting it looks like protecting the economy itself, our adversaries have found a pressure point. If they can’t break down the front door, they work on the people who hold the keys.
There’s a line often attributed to Lenin: the capitalists will sell us the rope with which we will hang them. Whether he said it or not, the Red Horse is counting on the Yellow Horse to make it true. The good news is the Yellow Horse is the one we can actually defeat, through accountability, transparency, and leaders willing to put the nation first.
What Must Happen Now
The book doesn’t stop at diagnosis, and neither should we. Here is where to start:
- Brief the targets. Executives of strategically vital companies should receive defensive briefings when our intelligence services learn they are being targeted. Leaving a CEO in the dark protects an investigation but leaves the company, and the country, exposed.
- Track the chips. Advanced AI chips should carry verifiable location and end-use controls, and the transshipment loopholes through Southeast Asia must be closed. Today, a license isn’t even required to ship these chips to countries like Singapore and Malaysia.
- Monitor foreign threats systematically. This is exactly why the book calls for SCAN, the Saving Civilization Action Network, to monitor foreign economic threats in a disciplined, continuous way rather than waiting for the next newspaper exposé.
- Hold the hearing in the open where possible. The November 18 briefing request is a good start. The American people deserve to know how our most critical companies are defending themselves.
- Guard your own house. If your retirement accounts hold broad index funds, you may own a much bigger AI bet than you think, a point we covered in Episode 422. Understand that concentration. This is not advice. I don’t know your situation. But it is something you must consider.
More on Economic War Room
The Nvidia spy story just broke, so you won’t hear it discussed on our current episodes of Economic War Room. But together, those episodes lay out exactly why this story matters.
Episode 422, “The AI Money Loop: Boom, Bubble, or Battle Space?” (out now) follows the money at the center of the AI boom, including Nvidia’s growing role as investor, financier, and guarantor to its own customers. It also covers how one announcement out of China, DeepSeek, wiped nearly $600 billion off Nvidia’s value in a single day, and why nearly all of the world’s most advanced AI chips depend on a supply chain running through the Taiwan Strait. As I said on that show, the real risk isn’t only an AI bust. It’s an AI bust that someone else knows how to trigger.
Episode 423, “The Fifth Horseman? AI as a Weapon of Economic Warfare” (premieres this Thursday) answers a reader’s three-word question: “5th horseman AI?” My answer: not yet. But AI is the most powerful weapon the four horsemen have ever had, and the race for advanced chips matters so much because whoever controls the most powerful AI controls the most powerful weapon. The real question isn’t what AI wants. It’s who is holding the reins. Now we learn Beijing may have been working on the man who builds the reins.
Tune in Thursdays on BlazeTV or through our website, and download the FREE Economic Battle Plan for each episode at EconomicWarRoom.com/battleplans.
The Nvidia affair should end any debate about whether we are in an economic war. We are. The only question is whether we will recognize it in time to win it. Remember: what we see as a marketplace, our enemies view as a Battle Space.
Kevin D. Freeman, D.Sc. (h.c.), CFA, is the host of Economic War Room and Pirate Money Radio, the founder of Freeman Global Holdings, and a New York Times bestselling author. His latest book is The Four Horsemen of the American Apocalypse and Our Six Trials by Fire.
