Jensen Huang, the CEO and founder
of NVIDIA, publicly admitted to an affair with a suspected Chinese espionage
operative.  Here is the deeper story and
what needs to happen.

There are copious news stories
with the details, and more will be revealed as investigations dive into the
incident, but in brief, Jensen leads one of the most powerful American
technology companies and was spotted several times in public with a woman who
is suspected of being a spy for China. 

The United States
counterintelligence agencies are investigating the woman, Alice Huang, who they
suspect is a Chinese intelligence asset that is using her access to Jensen for
the benefit of China.

Alice Huang is the managing
director of Megaspeed.  NVIDIA has been
doing business, selling advanced chips, to this woman’s company, which is
suspected of transferring sensitive technology to China.

Influence on Government Policies

During this time, Jensen
advocated loosening restrictions on highly sensitive technology to China.

After the connection to China
came to light, Jensen responded by sending a message to all NVIDIA employees
admitting to an affair with the woman, but denied any other wrongdoing.  The NVIDIA Board has initiated an independent
investigation, and the FBI is now involved as well.

This is quickly shaping up to be
a classic economic espionage influence operation that successfully targeted
Jensen.

Here are the deeper insights and
why it is important.

Influence Operations

Deep influence operatives act in
subtle ways to influence their targets. 
It may also lead to hard manipulation for the benefit of the
orchestrating government.  Jensen, going
public with this affair, although damaging to his personal life, career, and
NVIDIA’s reputation, is better in the long run. 
At this point, Jensen probably has good advisors, whom he is listening
to, that likely encouraged him to admit the relationship. 

Here is how China operates its
economic espionage influence operations:

An agent, either formal or
recruited due to their access, fosters a relationship with the target.  This may be personal and even sexual.  By simply being around the target, the agent
can potentially gather sensitive information, provide timely opinions, and
convey influential nonverbal cues to the target.  It is basic human nature to incorporate the
feedback from those you trust in your decisions and foreign influence
operations take advantage of this fact.

If someone you cared about,
respected, or had a close connection with smirked or expressed disdain for a
policy you were considering, it would be normal to subconsciously want to adapt
and more likely be willing to soften your position.

Targeting Powerful People

On the right person, this can
have major effects at the national level.

We can only ponder, when the US
government wanted to block the transfer of AI chips to China, how the
relationship with this woman influenced Jensen’s decision to make statements
like “China is not our enemy” and lobby the White House to allow NVIDIA to ship
over 600,000 advanced H200 chips to China. 

Influence-based espionage
activities can eventually turn harsher and more direct. 

If the circumstances require more
actions of the target that influence alone cannot achieve, or if the victim
attempts to sever the relationship, then direct extortion becomes a viable
option.  The agent or a handler can
threaten full exposure of the relationship, which could end a career, devastate
the company, and may destroy a marriage.  This is personal leverage intended to retain
and strengthen control over the target.

Breaking the Shackles

This is why what Jensen did is so
telling.

Admitting the relationship takes
the power away from potential extortionists. 
It is embarrassing and can end a career, but it is the right thing to do
in order to stop the extortion and break the control.  It also reveals intent and an openness to
fight against the outcomes of the manipulation.

Truth is powerful, and whatever
consequences result are likely deserved.

If these allegations are true,
that a Chinese agent was influencing Jensen, the attacker’s objectives were
likely to soften restrictions on technology to China, gain early insights into
emerging industry decisions, establish supply chains that avoid sanctions, or
create situations where intellectual property could be harvested for the
benefit of Chinese companies and their economy. 
This has been a common theme in previous economic-espionage activities
by China in the past.

NVIDIA Must Act

NVIDIA must take clear and
dramatic actions to reverse policies and views, to overcorrect potentially
manipulated decisions in the past. 

Here is, in my opinion, what
needs to happen next:

The board and CEO of NVIDIA
should do 3 things:

1. Block NVIDIA Tech and Products
to China: Immediately restrict all NVIDIA technology sharing with China and
Chinese companies, to protect America’s high-tech innovation, industry plans,
and to help sever China’s influence in the US supply chain.  This must include the tech they previously
advocated sharing and even more to show how seriously they take this situation,
to send a message to China, Russia, Iran, North Korea, and other nations who
are pursuing such tactics against leaders of Western companies and politicians.

2. Advocate for Regulations: After
such a compromise, NVIDIA must become a staunch political advocate to protect
not only chip technology, but all other related tech that China is seeking to
obtain.  It is imperative they use their
copious resources to show they will be a staunch advocate of protecting against
such economic espionage.  They must
support industry groups and lobbyists who are working across industries to
protect Western intellectual property, sovereignty, and independence. 

3. Establish a Board-Level Action
Group: The board must create a dedicated, permanent, independent action team to
maintain vigilance and protect its technology, people, customers, and reinforce
shareholder trust.  This oversight body
must report directly to the board and act immediately in 3 ways:

– First, look for other NVIDIA
executives, engineers, and other influential persons in the company who are
also being targeted or exploited.  If
China targeted Jensen, they are also targeting others in the company.  That is standard practice, and they must be
weeded out.

– Second, initiate an
investigation of all their suppliers and partners to restrict access, data
sharing, and collaborations that benefit China. 
They should work with the FBI and international counterintelligence agencies
to identify potential third-party adversaries.

– Third, they establish permanent
working relationships with international counter-economic-espionage agencies
and share best practices with other technology companies that are likely being
targeted.  Teamwork and information
sharing are incredibly valuable to counter such threats.

Rebuilding Trust

Lastly, seeing how trust is
broken and the risks of manipulation at NVIDIA have reached the highest level,
I recommend the board consider instituting a 20-year moratorium on technology
sharing with China.  Formalize this
position by implementing it into their charter to force a corporate culture
change, send a powerful message to its attackers, and show Western governments
that other aspects of their products are not affected, tampered with, or
compromised.

Red Sparrow Flies

I expect the woman involved with
Jensen, Alice Huang, to slip away and return to China, where she will quietly
be recognized as a patriot and used to recruit more people to act in similar
ways.  I doubt it will be as public as
the Russian spy Anna Chapman, who found fame after being convicted of spying
and returned to her homeland as a celebrity. 
China is much more discreet and persistently maintains denials regarding
its espionage activities.

We all must understand that this
type of economic espionage has been ongoing for more than 40 years against the
US.  China and Russia are leading experts
in these tactics.  If it is happening at
NVIDIA, it is happening elsewhere.  China
has the resources.

Jensen’s Path

Where Jensen is different is that
he quickly admitted the affair.  Many
would or have not made the admission, and remained in the clutches of their
handlers.  Such extortion, threatening to
expose infidelity and improper ties to a foreign intelligence operation, can
destroy a career, family, and permanently scar a reputation!  It is a powerful tool to maintain control of
the target. 

By proactively admitting it
himself, Jensen denies his enemies this power over him.  It is a bold decision.  Many are not that strong or willing to do the
right thing and accept the consequences. 
They would rather continue being a puppet and often either justify their
actions or deny the facts to themselves and others.

The Hidden Victims

That means there are untold
numbers of people in powerful positions who are currently being passively
influenced or outright threatened to work in the interest of China and other
nations seeking to manipulate and steal from the United States and its allies. 

This is just the beginning of the
NVIDIA story, but it is a reflection of what is going on with other companies,
politicians, technologists, and influencers. 

Hacking is not exclusive to
software and hardware.  This incident is
showing how people can be hacked, manipulated, and compromised as well, for
great benefit to the attackers.

Executives, policymakers, and
security must take the time to understand the bigger risks, and this incident
may open the eyes of consumers, investors, regulators, boards, and those being
manipulated. 

Let’s take action that punishes
our adversaries to dissuade them from espionage and counter their objectives by
making an example of how technology restrictions and penalties must be even
stronger. 

The NVIDIA board has an
opportunity to send a message to its shareholders, China, Russia, and others
that they will not be victimized and there will be adverse economic
consequences for such attacks.

The threat of foreign influence
operations will persist.  How we choose
to address the risks will determine how successful our adversaries will be at
manipulation and the persistence they will maintain to our detriment.  It is now our move.