Nvidia ‘honeytrap’ scandal rocks AI industry as tech stocks recover from slump - business live

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An apparent honeytrap scandal involving the boss of the world’s most valuable company and a suspected Chinese spy is rocking the AI sector.

Overnight, Nvidia announced it is launching an independent investigation following reports that founder and CEO Jensen Huang has been the target of “a foreign intelligence effort”

That effort, reports claim, led to Huang conducting a romantic relationship with a Chinese woman, Alice Huang , who was recruited to spy for China’s Ministry of State Security intelligence agency.

Last night, Huang admitted having an affair, telling Nvidia staff:

“I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.”

Huang added that he was “fully committed to Nvidia” and would work to earn back employees’ confidence.

But the issue goes much further than simply a CEO’s conduct. It falls squarely within Washington’s concerns that it could lose the AI race to China.

Alice Huang worked for a Singapore-based datacenter company called Megaspeed, which has been suspected of routing Nvidia chips to China and evading export controls.

Jensen Huang has been a critic of those restrictions, arging in May 2025 that US export controls designed to limit China’s access to artificial intelligence chips were a “a failure”, and had simply encouraged China to develop its own alternatives.

The revelation comes just a few days after shares in AI-linked companies tumbled, before a late recovery on Wall Street on Friday.

Today, Asia-Pacific markets are staging a recovery – Japan’s Nikkei has jumped by 2.2%, while Taiwan’s TAIEX has surged almost 5%.