On September 14, US lawmakers began an inquiry into Futurewei, a subsidiary of Chinese firm Huawei Technologies, over its shared physical space with Nvidia at its Santa Clara, California campus.
As tensions escalate in the AI chip industry between China and the US, lawmakers are becoming increasingly concerned about potential espionage risks. Let’s take a deep dive into the details behind this story, why it’s raising red flags, and what this means for the future of tech security.
Meet Futurewei.
Futurewei Technologies, a Huawei subsidiary in the US, drives research and development of next-generation technologies, especially in ICT, since its founding in 2001.
In 2018, Jesse Hong, a former employee, filed a lawsuit accusing Huawei of using Futurewei as a corporate spy tool, sparking suspicion about Futurewei.
The lawsuit alleges that the organization actively sent its employees to infiltrate closed-door Facebook telecommunications meetings, which they were barred from attending. They also made use of “consulting work” with US startups to obtain confidential information. The organization then transmitted the stolen information to executives in China.
Although the lawsuit settled in 2019, the organization had already caught the attention of the US House Select Committee on the Chinese Communist Party. In 2019, the US blacklisted Huawei over security concerns.
The Cause Behind the New Drama
Initially Futurewei held the prime lease on three buildings at the Santa Clara property located at 2330 Central Expressway, as well as two other adjacent buildings (which now form the Nvidia Santa Clara campus). This continued for at least a decade until Nvidia took full control of the buildings in 2024.
Futurewei then moved to a new address in San Jose, just a ten-minute drive from the Nvidia campus, as stated in a congressional letter opposing Futurewei.
In 2019, after the US government blacklisted Huawei, it barred American companies from supplying them with technology and software without a proper license.
That’s why after the 2018 incident, when Huawei listed Futurewei as its independent US subsidiary, the US government prohibited Futurewei from transferring its research back to the parent company.
However, recent findings of public filings, corporate records, and open-source reporting show that Futurewei is not so independent from its parent company after all.
This and Futurewei’s 2018 alleged espionage attempt raise hackles at the prospect of history repeating itself. Lawmakers fear that the co-location might have let Futurewei “piggyback” on Nvidia’s advances in semiconductor and AI technology.
The House Select Committee on the Chinese Communist Party (CPP) launched a recent probe into Futurewei by sending a bipartisan letter to Huawei Technologies. The goal of the letter? To investigate Futurewei’s role in “advancing Beijing’s authoritarian technology agenda under the direction of the CCP.”
“If Futurewei was used to infiltrate closed-door meetings and extract sensitive data through both deception and proximity, then its decade-long embedded presence within Nvidia’s campus—at the center of US semiconductor and AI development—cannot be immediately dismissed as incidental,” the lawmakers wrote.
Nvidia’s Response?
So far, Nvidia has been playing it cool. A spokesperson told Bloomberg that even with shared facilities, Nvidia always keeps a “separate Nvidia-only campus,” insisting their operations and intellectual properties are under tight security.
What’s Next?
The US House Select Committee on the CCP has called for an explanation from Futurewei. The organization must provide documents and contracts explaining why they chose that base and detail all activities tied to or involving Nvidia by September 28.
Final Thoughts
The US has, over the years, tried to stifle China’s growth in the AI and tech industry.
From the blacklisting of some Chinese companies since 2019, placing restrictions on the quality of chips that can be sold to China, and the total ban of semiconductor sales to China in April this year, it has been about maintaining its supremacy.
However, this backfired in a major way when China decided to start making its own semiconductors domestically, and at the forefront is Huawei. So far Huawei has begun coughing up products that are starting to contend with some of Nvidia’s products, like the Atlas 950 supercluster.
Due to this, it’s quite understandable as to why the US will want to take extra precautions with their technology. Regardless of the case’s outcome after September 28, it will likely heighten tension between both countries.
China and the US will be more wary of each other, which could lead to the rise of more regulations by both countries to prevent the other from gaining the upper hand.
