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Nvidia CEO Jensen Huang has admitted to having an affair, reportedly with a Chinese executive at a Singapore-based company that the United States suspects of smuggling AI microchips into China.

The scandal has focused attention on how China, a major artificial intelligence power in itself, obtains the cutting-edge chips despite U.S. export restrictions.

Nvidia designs advanced components originally created to handle 3D visuals in video games, called graphics processing units (GPUs).

These have the power to crunch colossal amounts of digital data, so are also used at scale to train and run artificial intelligence.

ChatGPT's 2022 launch showcased the potential of AI, sparking an investment gold rush as governments and tech giants raced to develop the technology further.

With chip orders pouring in, Nvidia's market valuation has soared to $4.5 trillion—putting it on par with Apple as one of the world's two most valuable companies.

Washington bans the export of Nvidia's top-end "Blackwell" and "Rubin" GPUs to China, citing security concerns, as advanced AI has military applications.

The policy also allows the United States' top AI labs to maintain their global lead.

Huang has lobbied the U.S. government to allow Nvidia chip sales to China, warning that the restrictions are fueling the rise of competitive homegrown alternatives.

This year Washington eased controls on Nvidia's previously banned—and less powerful—"H200" chip, with the United States taking a 25% cut of sales.

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