Chinese AI companies are trying to rent Nvidia-powered computing capacity at data centers outside China. Their fear, according to a November 12 Reuters report citing three people familiar with the matter: that the scandal around Nvidia CEO Jensen Huang could push Washington to close a gap in US export controls.
First, the facts as they stand.
On November 8, Huang told employees he had been unfaithful to his wife and that he takes "full responsibility." According to the New York Times, as cited by Reuters, the woman involved was a former executive at Singapore-based cloud firm Megaspeed, whom US authorities had concluded was a Chinese intelligence asset. Reuters said it could not independently verify that allegation, and China has denied it. US President Donald Trump said Huang told him he did not know the woman was allegedly a spy.
The same day, Nvidia's board launched an independent investigation, saying it had "no reason to believe" national security or company secrets were compromised and had "confidence in Jensen and his leadership team."
Three days later, that confidence looked thinner. On November 11, the Wall Street Journal reported that the company was preparing to oust Huang. A source told Reuters the board met late into Wednesday night to decide his future, after the New York Times reported a second extramarital relationship, this one with an Nvidia executive. Nvidia shares fell more than 8% in after-hours trading.
As of Thursday morning, November 12, no board decision had been announced, and Nvidia had not responded to requests for comment.
I covered the bigger picture in my full Nvidia PESTLE analysis. Here, I look at how a personal scandal is becoming a policy risk, and from there a revenue risk.