I really don’t like to get into other people’s personal lives. I consider it a matter between the people involved, assuming that they are consenting adults, and none of my business. But damn, everything about this story of Nvidia CEO Jensen Huang and the alleged Chinese spy, Alice Huang, is a bit hard to believe.

Just to orient anyone who has been living under a rock for the last few years, Nvidia is at the very center of the AI boom. Its top-line chips provide the computing power for the frontier models being developed by Anthropic and OpenAI. For this reason, it has been prohibited from selling the top-line chips to China and restricted in the volume of lower-grade chips that they could sell. This was a policy initially put in place by Biden and continued under Trump. The idea was to maintain the United States’ advantage in developing frontier AI models.

At its peak, last month, Nvidia’s market cap almost reached $6 trillion. In an industry where people like Elon Musk, Sam Altman, and Mark Zuckerberg are the heavyweights, Huang seemed like the adult in the room.

Well, it seems that the adult in the room was selling chips to Chinese businesses that were shell companies acting as fronts for sanctioned companies. The extent to which Ms. Huang was involved in these decisions is not entirely clear at this point, but in any case, these sales make a mockery of the efforts to limit exports of Nvidia chips. If sanctioned companies can get access to chips simply by using a front company, the export prohibitions don’t mean much.

According to the New York Times, which broke the story, Trump had been warned at least twice about Jensen Huang’s relationship with a woman who could have ties to Chinese intelligence agencies. Trump apparently ignored these warnings. (Trump has denied he ever got these warnings, but of course he would.)

We might expect the FBI to be on top of something like this. After all, monitoring efforts by foreign intelligence agencies to gain access to technology that could have military uses, which is true of advanced AI, is one of the areas where the FBI is supposed to be involved.

But the current director, Kash Patel, fired many of the agents with experience in the area, and others opted to leave rather than deal with the Trump administration. Instead of worrying about protecting cutting-edge technology from potential adversaries, Patel had the FBI focused on investigating James Comey and copycats posting “86 47.”

To be clear, I am less scared of China getting some Nvidia chips than others might be, but I do think this failure to enforce sanctions speaks volumes about the efforts to control a potentially dangerous technology. There is little question that misprogrammed AI, or maliciously employed AI, can do enormous damage. We need to count on the people in the industry and/or government agencies to protect us against these risks.

This latest episode doesn’t give us much reason to believe they are up to the task. For what it's worth, Nvidia’s stock has fallen roughly 18 percent since this affair came to light, eliminating almost $1 trillion in market value.

Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack, from which this is reprinted with permission.