Right. There are tons of companies (shell or otherwise) all over South-East Asia which feed China with what they need, sanctions or no sanctions.

Hence there is no way the US did not know of this.

My conspiracy theory is that the US used this to pump "poisoned" Nvidia chips (with hardware trojans via fab masks) into Chinese datacenters. Maybe the Chinese found out (they stopped buying) and hence this was framed publicly with/without the consent of the parties involved (who may not know they were just pawns) as "CEO honeytrapped by beautiful spy" which is a nice salacious piece of popular news.

PS: Michael Barr wrote a sci-fi novel "Metacompiler" which has something about hardware trojans - https://metacompiler.me/

If you are interested in earlier conspiratorial sci-fi books featuring hardware trojans, you might try to get a copy of another sci-fi novel called "Acts of the Apostles" by John Sundman.

John Sundman wrote and published the book in 1999 after working for many years at Sun Microsystems so it is a fiction born out of the Silicon Valley geek/tech culture of that era.

Pertinent only to this thread's context, and not indicative of anything in particular, John would have been at Sun for many years at the same time as Nvidia cofounders Chris Malachowsky and Curtis Priem, late 80s through early 90s.