On Sunday 8 November, Nvidia chief executive Jensen Huang told staff by email that he had been “unfaithful to my wife”, according to Al Jazeera, and wrote that his actions had hurt his wife and children. The board said a committee of independent directors, advised by outside counsel, will investigate, and Huang remains in post.
The case reaches beyond his private life because of who the woman is alleged to be, and none of the allegations has been tested in court.
The Allegations Against Alice Huang
Alice Huang, also known as Huang Le, is a former executive at Megaspeed, a Singapore firm that buys Nvidia chips. She is not related to Jensen Huang. The New York Times reported on 29 October that US officials suspected her of trying to cultivate him to learn about Nvidia’s technology.
Spy agencies reportedly monitored her for about a year because of her ties to China, according to The Next Web’s summary of the Times report.
The same summary says officials did not believe Jensen Huang knew she might be gathering information for China. Neither person has been charged, and the Chinese Embassy in Washington denied any spying.
Megaspeed has said it hired outside lawyers to examine the claims. Nvidia’s board says it has no reason to believe national security or company secrets were compromised.
Megaspeed Under the Microscope
Megaspeed is one of Nvidia’s biggest customers, having bought about $4.8 billion in equipment, according to the Times as cited by Al Jazeera. The Commerce Department is investigating whether the firm helps Chinese companies get around US export restrictions, the Times reported.
An earlier Times report said Megaspeed was poised to buy $2 billion of Nvidia technology over the next year.
Those questions fall on Nvidia too, because they concern how closely it tracks where its AI chips end up. Nvidia says its compliance audits found no export violations.
In May, the short seller Culper Research argued that the market underpriced Nvidia’s exposure to China. An export inquiry and an alleged intelligence link are separate issues, though they now sit in the same news cycle.
Shares Slip as Rivals Rise
Nvidia’s shares fell about 5 per cent on Monday 9 November, to roughly $177, according to Yahoo Finance’s live coverage. The stock is now negative for the year and down about 21 per cent over the past month.
AMD, Broadcom and Micron rose with the broader market, which suggests the reaction was specific to Nvidia.
The scandal is not the only pressure on the stock. Al Jazeera reported that Nvidia lost $450 billion in market value in one session the week before, after Republican midterm losses hit AI shares.
Nvidia is worth about $4.5 trillion, nearly 7 per cent of the S&P 500. A 2018 study cited by Yahoo found stocks fell about 4 per cent on average after a chief executive’s conduct scandal, or roughly $185 billion at Nvidia’s size.
Washington Wants Answers
Three House Republican chairs, John Moolenaar, Brian Mast and Rick Crawford, have asked Huang to attend a closed-door briefing on 18 November. He has until 11 November to accept or propose another date.
Democratic Senator Elizabeth Warren said Huang and the board “owe Congress answers”, and Republican Senator John Cornyn called for congressional oversight. The Times reported that Secretary of State Marco Rubio oversaw a classified memo on the issue earlier this year, according to Yahoo.
President Donald Trump called Huang “a fine person” and said he “probably has an excuse”, according to Al Jazeera. Yahoo reported that Trump thinks Huang should stay as chief executive.
Huang previously declined a June invitation from Warren to testify about Nvidia’s China chip sales. Nvidia spokesman John Rizzo said the company is confident the US government would tell it if anyone were a threat to American industry.
A Founder Without a Named Successor
Huang, 63, co-founded Nvidia in 1993 and is its public face and fifth-largest shareholder, according to Bloomberg Línea. The company has not publicly named a successor. Analysts quoted there say it has done little to show it is ready for a transition.
Chief financial officer Colette Kress is one of four executive vice presidents, and two of the others are over 70.
Patrick Moorhead told Yahoo he does not expect Huang to be pushed out unless the investigation finds something new. Wedbush’s Matt Bryson said the affair could weaken Huang’s credibility in Washington whatever the outcome.
An affair does not itself prove a security breach, and suspicion of Alice Huang is not evidence. The investigation will have to establish the facts, and the board will then decide whether its confidence in Huang still holds.
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