From Cliveden to compute: The oldest trick in the book now threatens the AI race

The Profumo affair

Britain’s headlines in the early 1960s were dominated by one story: the Profumo Affair. The Opposition under Harold Wilson treated it first and foremost as a national security matter, irrespective of whether the Soviets had actually obtained anything useful. At a pool party held at the Cliveden estate, then Secretary of State for War, John Profumo, met Christine Keeler, a beautiful showgirl and cabaret dancer. They later had an affair, which itself would have been a story: Profumo was a Tory cabinet minister of aristocratic stock, a former decorated military officer and, of course, married. But that wasn’t what rocked the nation. 

While in a liaison with Profumo, Keeler was simultaneously in a sexual relationship with another man: Yevgeny Ivanov, a Soviet naval attaché later assessed as a GRU officer. Whether this led to Moscow acquiring British secrets is not clear. The subsequent judicial inquiry found that there had been no national security breach, though some Soviet sources contest that. Profumo lied to Parliament about the affair, leading to his resignation and the end of what was an illustrious political career in which he had been tipped for higher office including, by some, the premiership. As ever, it was the cover-up, not the indiscretion, that finished him. But what became politically explosive was the possibility of access, especially when that access could have led to compromising leverage. For Wilson this was a gift. He relentlessly pressed the point that Prime Minister Macmillan’s government has been “gambling with national security” in allowing the situation to arise and in its handling of this risk. The scandal played no small part in Macmillan’s subsequent resignation in October 1963, less than six months after the story broke.

With the passage of time, more of the security service’s own role in the affair has come into focus. MI5 had engaged Stephen Ward, the osteopath and socialite dandy who introduced Keeler to both Profumo and Ivanov. Far from this being a Soviet-inspired operation, their plan was to use Ward to turn Ivanov and cause his defection. Having been abandoned by the Service, Ward later killed himself while on trial for vice charges.

Despite Keeler never having been shown to have been a Soviet asset, the episode remains the textbook British case of sexpionage, or “honey traps”. The tactic is older than the Cold War and is still in play. From Mata Hari to the East German “Romeo” spies and the Soviet “swallows”, exploiting sexual desire for recruitment, coercion or influence has long been a feature of spycraft. Sometimes loose “pillow talk” is all that’s needed, perhaps with subtle directions given that serve the interests of the new romantic partner’s handlers. Close access to the target can also provide unrivalled opportunities for covert technical collection: secretly accessing their devices; passively eavesdropping on calls; shoulder-surfing on phone or computer use; and installing persistent surveillance equipment in private spaces. At other times, the threat of exposure means the target will tell or do anything to protect themselves - including treason.

The current case

Reports in The New York Times and The Financial Times claim US intelligence assessed that Alice Huang (also known as Huang Le), an executive at the Singapore-based cloud-computing firm Megaspeed, was recruited by China’s Ministry of State Security. Citing anonymous sources describing classified material, both papers say she was tasked to collect intelligence on Jensen Huang and to encourage him to press for advanced AI chips to be made available to China. A US memo shared with a small group of top officials before a Trump–Xi summit this May stated that Huang had been romantically involved with her. Photographs of the two together have circulated. 

Jensen Huang has now admitted the affair and apologised to his family, shareholders and employees. Nvidia has announced an independent investigation into the relationship. The company has said its board has no reason to believe company secrets or national security were compromised, and that Huang remains committed to leading the firm. It had previously stated that an internal probe into prior export-control breach allegations found no evidence of wrongdoing. 

Naturally, China has called the claims groundless speculation and unsubstantiated smears. No charges have been brought and no evidence of specific secrets transferred has been produced publicly. As with the Profumo case, intelligence services will be wary of what information hits the public domain. 

The strategic bottleneck

If there’s one factor that constrains the super-power race between Washington and Beijing today, it’s advanced AI semiconductors. The facilities that produce them at the leading edge are exceptionally rare, creating a strategic bottleneck. The overwhelming majority of advanced logic capacity is held at TSMC in Taiwan. The sole global source of extreme ultraviolet lithography machines, needed to print the smallest circuit features on the logic chips used in high-performance AI accelerators, is found at ASML in the Netherlands. At one time, the most resourced efforts of superpower espionage were pointed at nuclear weapons and their delivery systems. AI and its enabling technologies now receive the same priority. And alongside collection activity to satisfy such intelligence requirements, domestic counterintelligence must position accordingly, weighing that shift among a much broader threat picture than existed during the Cold War. The targets are no longer only government laboratories and military programmes. They include the private executives who control the export, licensing and lobbying decisions that determine whether critical bottlenecks hold.

Megaspeed has long been on the radar of US intelligence. Having originated as the Singapore arm of a Chinese gaming company in 2023, it was subsequently moved through offshore entities before being presented as a Singapore-based cloud partner. Its purchases, channelled through Malaysian and Singapore affiliates, sit within a wider pattern of third-country diversion that US officials have been investigating. Chinese firms, operating under varying degrees of CCP control, rent capacity in foreign data centres via remote-access arrangements, creating a loophole far harder to police than physical shipments. Nvidia has lobbied hard for limited exports of its H200 AI accelerator GPU to China, with Huang himself having met Trump on the issue. It is one of a handful of advanced Western AI chips that China can legally obtain under the current US export controls, and much desired by Beijing as it seeks to close its significant domestic gap in high-end AI accelerators. The company has said its internal inquiries found no evidence of diversion. Republican lawmakers have requested that Huang attend a joint, closed-door briefing of the China, Foreign Affairs and Intelligence committees to address his relationship with the Megaspeed executive and the associated espionage allegations. That briefing, scheduled for 18 November, will be the first real test of whether Congress treats the intelligence as more than a newspaper story. 

Some sceptical observers have already read the episode as a covert effort to constrain Huang’s lobbying and tighten oversight of chip flows. As the MI5 role in the Profumo case proved, matters involving the intelligence services and high-stakes agendas are rarely black and white.
 

Britain’s exposure

The Nvidia revelations will come as no shock to Britain’s intelligence services; China’s espionage efforts are one of their highest counterintelligence priorities. In September, MI5 issued a rare public alert to British universities and research institutes, telling them to scrutinise their relationships with Chinese institutions more carefully. Though the UK has no advanced logic fabrication plants of its own, its exposure comes through research collaborations, investment screening, and the supply chains that feed ASML’s ecosystem and the downstream packaging and testing work done across Asia. And as Thames House has rightly warned academics, the fight to protect the UK from hostile intelligence is a responsibility both the State and businesses must bear.  

In the 1960s, cabinet ministers, government scientists and foreign diplomats were the high-leverage targets of their day. Today, the AI race means that they also include private-sector executives who sit on export decisions, standards bodies or major procurement contracts. A small number of firms and individuals control the enabling technologies, and personal access routes can still be used to reach them. The Profumo affair showed how quickly unexamined access can become a national-security problem, irrespective of whether a security breach occurred. The current case is a reminder that the method has not been retired.