Jensen Huang is not only a “key man” for Nvidia’s AI empire but more broadly for the US economy – but that doesn’t mean he and his job will be safe from the ire of Democrats on Capitol Hill next year.
That’s the assessment from corporate governance experts and CEOs – including those with ties to the company – following Nvidia’s 63-year-old CEO’s admission that he was having an affair with a woman who the feds believe was a Chinese spy.
To be clear, there are probably only a handful of CEOs who define their companies like Huang; think Elon Musk for Tesla and SpaceX, or Jamie Dimon at JPMorgan Chase. But unlike Dimon, Huang has no succession plan – something he has oddly boasted about in the past.
Nvidia’s board is known as being an even bigger rubber-stamp than even Musk’s – it’s populated by executives from Taco Bell and the NFL, not exactly the skill set associated with a powerful tech company.
That’s why when initial reports hit of the affair, the market reaction was not catastrophic. Wall Street seems to be betting Huang will survive. Shares of Nvidia fell more than 4% as I write this, which seems like a lot unless you consider that its market cap remains well above $4 trillion, the market’s second largest.
But this is just the beginning of the company’s problems, these people tell me. Because of the details of the dalliance, one that goes far beyond Huang having extramarital sex, Nvidia and its board will be facing unprecedented scrutiny from a fiduciary standpoint to investors but also as a national security problem for the country.
That full-on vetting will come not only from the media but a Democrat-led Congress that’s set to take over in the new year. Huang hearings are a no-brainer given the company’s central role in the burgeoning AI economy and its deep ties to the country’s national security apparatus and his ties the the party’s chief nemesis, President Trump.
“There’s no way this guy survives after the Dems start holding hearings,” was the assessment of one corporate lawyer who asked not to be named because his firm does significant business with Nvidia.
“The minute they start asking him about what he told this woman between the sheets, his board will have to cut him loose because just having the affair with this person violates all sorts of corporate governance standards,” the source added. “Then you throw in the national security stuff and Trump ties and it’s a non win even for the weakest of boards.”
Here’s the latest on the Nvidia CEO’s affair with an alleged Chinese spy:
President Trump has tried to downplay the seriousness of the revelations, stating that Huang is an “honorable guy” and that the Nvidia CEO – which has something close to a cabinet seat in the Trump White House for developing its tech and AI policy – has “done an amazing job for our country.”
But Democrats, who just won large majorities in both the House and the Senate, won’t be as forgiving once they take power – and will likely be Huang’s undoing, these people add.
CEOs are human, of course, and Huang wouldn’t be the first married chief executive who had an affair. The list is too long to fit in this column. But sex isn’t the only problem Huang faces.
His alleged ex-mistress Alice Huang (she is not related to Jensen) is both a citizen of China and a top executive at Megaspeed, a Singapore-domiciled company that was buying Nvidia’s AI chips. Having sex with a vendor is a basic corporate governance no-no since it could be viewed as a quid-pro-quo for deals.
“I couldn’t get away with doing that,” one former CEO said of a hypothetical affair with a vendor. “It opens up too many questions about the type of information I might have given her; my board would have killed me.”
Yet it’s the influence that Huang wields that could eventually make for his inevitable undoing, these people add. Rumors have been circulating since the spring about the unusual relationship between the two; Culper Research, a short-selling outfit in May said that Nvidia might have a “China problem,” adding “Nvidia CEO Jensen Huang has not only vouched for Megaspeed, but seems to have quite literally walked alongside Megaspeed at every step, while maintaining an uncomfortably close relationship with Megaspeed’s Alice Huang, a Chinese national.”
At the time Nvidia’s reps said the relationship was all business (a rep had no immediate comment). That’s despite photos of the two socializing started to swirl on the internet. It was around this time that the US Secretary of State Marco Rubio issued a memo warning that Alice Huang was believed to be a spy.
Oddly, Jensen Huang remained in the administration’s good graces even as he was pushing to allow China to buy even the most advanced of Nvidia AI chips. A compromise was then worked out where the company would sell China its less advanced chips.
All of which will be thoroughly investigated by the Democrats in the New Year is a certainty. Another certainty, my corporate governance sources say: Nvidia will soon have a CEO succession plan.