Billionaires Haggle Over Chips While Trump Flies to Xi

Nvidia announced on Thursday that Jensen Huang, its founder and chief executive, will step down, just days before his closest political ally flies to Shenzhen to sit across from Chinese President Xi Jinping. The reason: US officials suspect Huang's relationship with Alice Huang, a former Megaspeed executive, amounts to a pipeline to Chinese intelligence. China denies it. Nobody has produced a trial, a verdict, or a vote. Just a boardroom announcement.

Who Has the Power

United States President Donald Trump travels to Shenzhen next week for the Asia-Pacific Economic Cooperation (APEC) summit. Two heads of state, one table, and a pile of semiconductors between them. Huang rode along on Trump's May visit to Beijing, a surprise late addition to the delegation, because Nvidia has struggled to get its H200 AI chips approved for sale in China. That was about six months ago. No breakthrough was announced.

Here's how the deal was built. In December 2025, about 11 months ago, Trump approved H200 sales to China, with 25 percent of proceeds to be paid to the US government. The state takes a cut. The corporation takes the rest. Huang had pushed Washington to ease restrictions, arguing that wider use of US technology would help Washington hold onto its lead in AI development. China hawks in both parties objected. Trump overrode them, and has called Huang an "honourable guy" throughout the scandal.

What They're Calling Security

Shipments stayed low anyway, because Beijing slow-walked import approvals to prop up its own chipmakers. Two states, each steering a market toward its own national champions. Procurement notices seen by AFP show a Chinese university linked to the country's defence establishment bought Nvidia H200 chips through a third party in September and October. Axios reported that Commerce Secretary Howard Lutnick had held up a planned crackdown on firms suspected of funnelling Nvidia chips to China.

China's Foreign Ministry spokesperson Mao Ning said on Thursday: "The US side should stop fabricating such 'spy' narratives as a pretext for imposing a technological blockade." She added that China is willing to work with the US to implement the consensus reached by the two leaders. Shares in Moore Threads, MetaX and Cambricon, China's leading graphics processor makers, jumped nearly 10 percent that same day. Somebody always profits from the standoff.

The Reform Trap

The pressure for a tougher line comes mostly from Congress, where the Democrats take control of both houses in January. On Wednesday, Democratic Senators Elizabeth Warren and Chris Coons asked Lutnick, Secretary of State Marco Rubio and White House chief of staff Stephen Miller to preserve all records on Nvidia's chip exports to China. "This incident raises significant concerns about the federal government's ability to effectively enforce our export controls and protect our national security," the senators wrote.

A records-preservation request. That's the opposition. Lian Jye Su of the research group Omdia called a tough US line on AI and China "one of the rare political consensuses domestically across the aisle." Both parties agree on the blockade. They quarrel only over who manages it.

The analysts see little changing. Steve Okun, a Singapore-based geopolitical analyst, called relations between Washington and Beijing "a stalemate at best." Gabriel Wildau of the advisory firm Teneo said Trump "shows no sign that he intends to disrupt the current US-China rapprochement." Carsten Holz of the Hong Kong University of Science and Technology said Trump "would not seem to have a coherent China policy and therefore his position in the upcoming talks in Shenzhen is hard to predict." Holz added that Huang's personal affairs "will be of little relevance" to China-US relations.

Okun expects pressure to build next year: a Remote Access Security Act aimed at stopping Chinese firms from reaching advanced chips through the cloud, and possible Commerce Department export controls on Megaspeed or licences for chips sent to countries like Singapore and Malaysia. That would strain relations in 2027, he said, "but that's not going to happen next week."

Next week, then, the people who decide the fate of the world's most advanced computing hardware will meet behind closed doors in Shenzhen. Workers in Singapore and Malaysia, caught in the licensing crossfire, weren't invited. Neither were the rest of us.