Huang’s memo admits an affair and pledges cooperation with the investigation
Nvidia shares tumbled Monday after the $4.3 trillion chipmaker said its board was investigating chief executive Jensen Huang following reports that he was “the target of a foreign intelligence effort.” Nvidia posted two announcements Sunday: the first disclosed the inquiry, and the second was a memo from Huang in which he admitted having an affair and said he would cooperate with the investigation.
The New York Times and other outlets reported that U.S. intelligence agencies believe Huang became involved with a Chinese woman at Megaspeed, a Singapore-based company buying Nvidia chips. The reports said the woman was recruited by China’s Ministry of State Security to spy on Huang or possibly try to influence U.S. policy. NPR tech correspondent John Ruwitch said NPR had not independently corroborated the reports.
The New York Times also reported that Megaspeed was under government investigation for circumventing U.S. export controls and helping Chinese technology companies get access to restricted chips. Ruwitch said he reached out to Megaspeed and had not heard back. Megaspeed has previously denied wrongdoing.
Asked why the matter stands out, NPR host Sacha Pfeiffer noted that China spying on foreign companies is “not uncommon.” Ruwitch said he had covered China for a number of years and foreign businesses there were constantly complaining about government efforts to hack or spy on them to learn corporate secrets. He said Nvidia was “in a league of its own in terms of its importance,” called its chips “crucial to the AI boom” and described the company as “entangled in a web of investments with other AI companies.” He cited Nvidia’s investments in OpenAI and Anthropic as examples; those companies, in turn, buy chips from Nvidia.
Daniel Newman, chief executive of the tech research firm Futurum Group, told Ruwitch, “He is the company.” Ruwitch said, “Jensen Huang founded it. He turned it into the juggernaut that it is today.” He said Huang runs Nvidia in a way Newman described as “autocratic” and added, “He’s the face of the company. He makes all the big decisions, and there aren’t many layers of bosses between him and everybody else.”
Newman said it was unclear whether much thought had gone into a post-Jensen Nvidia until now. He then said, “You can be absolutely sure that a succession plan is now being drawn up, that there are much crisper and congruent thinking about putting a succession in place, having something to announce to their board, to their investors, to their ecosystems, to their partners.”
Nvidia’s Sunday statement said the board had confidence in Huang and his leadership team. Ruwitch said he reached out to Nvidia on Monday and had not heard back.
Ruwitch said Nvidia’s share price may be in for a bit of a rocky ride, but from a business perspective the company remains in a strong position. He said Nvidia’s microchips are “the gold standard,” many companies depend on them and demand is expected to remain strong for some time to come.
The U.S. banned Nvidia’s best chips from being sold in China, Ruwitch said, out of concern that they could help China’s AI industry catch up with the United States. He described Huang as one of the most prominent voices arguing against the ban. Ruwitch said Huang believed it would be “actually good for the U.S.” if Chinese companies were hooked on American chips.
Ruwitch said, “I think we can expect scrutiny from Congress on this.” He added that Huang had already been summoned by three House committees to brief them on the matter.
Ruwitch said one of the big questions to watch was what the government knew and when. Some reporting around the matter says intelligence agencies told senior officials, including President Trump, about it a year or so ago. President Trump was scheduled to go to China next week for an Asia-Pacific summit, where he was scheduled to hold talks with Chinese leader Xi Jinping. Ruwitch said it would be interesting to see how the matter plays out there.