Nvidia Faces Internal Probe and FBI Inquiry Over Alleged $7.5 Billion Chip Shipments to China

Nvidia's board has launched an internal investigation and the FBI is reviewing a network of companies that allegedly shipped approximately 240,000 restricted chips worth at least $7.5 billion to China. The network was reportedly tied to a Chinese businesswoman and leveraged connections to Nvidia and its distributors.

Nvidia is facing regulatory and internal scrutiny following reports that chips valued at least $7.5 billion were allegedly shipped to China through a network of companies. According to reports, the transactions involved approximately 240,000 chips, including H100, H200, and A100 models, which are subject to United States export restrictions.

The operation was reportedly built by a Chinese businesswoman named Alice Huang, alongside her husband and sister, utilizing a network of companies established across China and Singapore. At the core of this network was Shanghai Century Litong, a China-based entity founded in June 2023. By October of that year, the firm reportedly secured preferred cloud partner status with Nvidia, granting it priority access to chip supplies.

Reports indicate that when standard orders for restricted Nvidia chips stalled, Alice Huang utilized personal and business ties to Nvidia and its distributors to bypass bottlenecks and secure supplies for Chinese firms, including Alibaba, Tencent, Megaspeed, and Shanghai Century Litong.

Following these developments, Nvidia's board of directors initiated an internal investigation to determine whether CEO Jensen Huang, 63, had been targeted in a foreign intelligence operation. Nvidia's CEO reportedly informed employees about infidelity in his personal life without providing specific details regarding the relationship.

The Federal Bureau of Investigation (FBI) is also looking into the matter. Nvidia did not immediately respond to requests for comment, and representatives for Alibaba, Tencent, Megaspeed, and Shanghai Century Litong were unavailable outside regular business hours. In response to the unfolding investigation, Nvidia shares closed down more than 4%.

"This situation highlights the critical intersection between corporate governance, strict international trade compliance, and geopolitical supply chain controls. For global technology firms, vetting partnerships and maintaining rigorous oversight over distribution channels is essential to prevent regulatory violations. As investigations by both the board and federal authorities progress, supply chain transparency and compliance frameworks will face heightened scrutiny from markets and regulators alike." — Dr. Shishir Gupta, Founder & CEO, StartupLanes