What did Huang—and the Trump Administration—know about the alleged Chinese spy he was involved with?
The Nvidia C.E.O. Jensen Huang’s affair with a Chinese businesswoman whom U.S. officials believe to be a spy could, as others have pointed out, turn out to be the costliest extramarital dalliance of all time. After the Times reported on Huang’s relationship with the woman—Alice Huang, or Huang Le, an executive at a Singapore-based tech firm called Megaspeed International—he confessed over the weekend that he had been “unfaithful.” (The Chinese government has denied that Alice Huang is an intelligence asset and called the story “a smear.”) By Tuesday afternoon, Nvidia’s stock had tumbled by more than ten per cent, and Huang’s stake in the chip company had lost more than seventeen billion dollars of its value. On the plus side for Huang, the roughly eight hundred and seventy million shares that he and his family trusts own were still worth about a hundred and forty-five billion dollars.
Known for his A.I. evangelism and his black leather jackets, Huang, along with Elon Musk and Mark Zuckerberg, has led the trend of tech billionaires dressing like rock stars. On trips to Asia and Europe, he’s sometimes been mobbed by fans—a phenomenon that became known as Jensen-mania. His celebrity has rested on the foundational role that Nvidia plays in the A.I. ecosystem, where its high-powered microchips are used to train and run large language models like ChatGPT and Claude. A single Nvidia G.P.U. (graphics-processing unit) can cost more than fifty thousand dollars, and some big data centers employ tens of thousands of them. In the past few years, as the great A.I. build-out has proceeded, the demand for Nvidia’s products has greatly exceeded the supply, enabling the company to raise prices and generate vast profits. In the quarter that ended in July, it made nearly sixty billion dollars on revenues of ninety-six billion—a margin that loan sharks would envy.
A spokesman for Nvidia told the Times last year that there was no evidence of smuggling. He also said the firm’s compliance department had looked into Megaspeed and found it was “wholly owned and operated by a company based and headquartered outside China, with no China shareholders.” It’s hard to take that statement at face value. Last week, days before Jensen Huang confirmed the affair, the Times reported that the same Nvidia spokesman had said the C.E.O.’s interactions with Alice Huang were “not unusual,” and were consistent with meetings he has with many of Nvidia’s customers.
Senior members of the Trump Administration, beginning with the President, also have a lot of explaining to do. In the past couple of years, Huang has emerged as a close adviser to Donald Trump on A.I. policy, and a supporter in other areas, too. In October of last year, Nvidia donated twenty-five million dollars to one of the President’s pet projects, the renovation of the East Wing. (Huang said at the time that he was “incredibly proud and delighted to help contribute in a small way.”) Just weeks later, in a significant relaxation of the Biden export restrictions, Trump announced that Nvidia would be allowed to sell its powerful H200 chips to China.
In May, Huang accompanied Trump on a state visit to Beijing, hopping onto Air Force One in Alaska after a last-minute request from the President. According to the Times, the China trip came after a highly classified memo, produced under the oversight of Secretary of State Marco Rubio, warned top U.S. officials that the Nvidia C.E.O. was in a close relationship with a Chinese spy. In response to a question from reporters on Sunday, Trump said he didn’t regret not acting on the intelligence, adding that he regarded Huang as “an honorable guy” who “probably has an excuse for it.” On Monday, Trump said the F.B.I. was looking into the Huang matter, but said, “I think that he’ll be in good shape.” Trump also said he had spoken to Huang, who had told him he hadn’t known that Alice Huang was a spy. “I really believe him,” the President added. That same day, Hakeem Jeffries, the likely next Speaker of the House, said Congress “needs more information” about the Nvidia scandal.
The emerging line from Huang’s defenders is that A.I. is so vital to America’s future, and Huang is so vital to Nvidia, that, like the big banks during the Great Financial Crisis, he’s too big to fail. (“Jensen is irreplicable for America’s A.I. leadership,” the MAGA-friendly venture capitalist Shaun Maguire posted on X.) At least on the basis of the initial market reaction, this argument can be questioned. As shares in Nvidia slid on Monday, the rest of the stock market, which the A.I. trade has been driving all year, rallied strongly. The tech-heavy Nasdaq closed up by nearly 2.75 per cent.
Evidently, the fate of the A.I. boom rests on larger questions than whether Jensen Huang was aware, or should have been aware, that his lover was a spy. Among the tech companies whose stocks jumped on Monday were AMD, Intel, and Alphabet. Though Nvidia retains a big lead in chips used to train the most advanced large language models, all three produce chips that compete with its products in some parts of the A.I. ecosystem. AMD’s revenues from sales to data centers rose by nearly a hundred per cent in the latest quarter. Alphabet’s Google division is developing chips designed for small language models used for specialized tasks, such as on-device translation and operating household devices.
Nvidia’s grip on the A.I. industry, which earlier this year propelled its market valuation to $5.5 trillion, could gradually become less tight. Right now, though, it would be folly to understate the company’s role in building and financing the A.I. infrastructure that already exists or is under development. As well as supplying many of the chips that A.I. data centers rely on, it has, according to one tally, provided three hundred billion dollars in financial support, including loans and credit guarantees, to the customers that bought these products. On Wall Street, there is intense debate about the soundness of these circular-financing arrangements; one thing not in doubt is that an acute crisis at Nvidia could propagate across the A.I. sector, with consequences that are hard to predict. The betting on Wall Street is that the spy scandal won’t rise to those proportions, but it’s still unfolding. ♦
