NVIDIA and Jensen Huang aren’t the only ones in the crosshairs.
Jensen Huang has had a bad week. It all began when news surfaced that he’d been having an affair with an alleged spy for the Chinese government. In response, NVIDIA’s corporate board began an investigation, and the FBI launched a probe, too. Then, late last night, news broke that Huang had at least one other affair, with a company executive who reported directly to him. By Thursday morning, Huang had resigned, and the chip company had appointed a new interim CEO. Reuters then reported a second affair with a different employee.
Obviously, this is bad news for NVIDIA. Stocks are down, and Democrats, now preparing to take back Congress, appear to be ramping up plans to investigate the company and any possible risks to US national security. But this is also bad for a range of other entities that have a stake in NVIDIA’s success.
Here are a few entities that stand to feel some of the blowback.
The White House
The White House, fresh off a devastating loss in the midterm Congressional elections, stands to face questions about why it held off on taking action after it learned about Jensen Huang’s affair with an alleged spy. The Trump administration already had a poor reputation for security and intelligence practices, but seemingly sleeping on this knowledge is all but certain to raise the prospect of further probes.
Trump officials, notably, have cleared deals allowing NVIDIA to sell advanced computer chips to the US government, and even leveraged its influence over the company’s chips in geopolitical negotiations.
Current and prospective NVIDIA customers
The US AI supply chain runs on NVIDIA. OpenAI, Anthropic, and a slew of other large language model developers rely on the company’s hardware. Meta, Microsoft, and Oracle are also major customers. This is, in large part, because GPUs—or graphics processing units—are particularly adept at the kinds of computations needed to develop large reasoning models.
Now, with so much scrutiny on NVIDIA, there’s a risk those companies—and any deals in progress—might face headwinds as the still-scrambling board figures out what to do next. The Semiconductor Industry Association, a major trade group that advocates for chip companies, declined to comment. Hugging Face, an AI developer that agreed to an acquisition by NVIDIA earlier this year, did not respond to a request for comment.
Huang, notably, doesn’t seem to have had a succession plan, and reportedly had 60 direct reports instead. Colette Kress, the company’s chief financial officer, was appointed interim CEO on Thursday morning.
The scandal and disarray, of course, isn’t just bad for American companies that need NVIDIA’s chips. Given the extent to which Jensen Huang advocated for loosening chip sale limits to China, any customers with suspected links to the Chinese government may also see far more scrutiny on NVIDIA deals than before.
U.S. federal agencies
The U.S. government is a major supporter of NVIDIA. The US government has also signed plenty of deals to use Nvidia on its own systems, including classified networks. The latest scandal is not only embarrassing for the US government, but raises concerns about the extent to which government officials were aware of the affair, and how they might have influenced the company’s dealings with federal agencies it works with. One former federal chief information told Fast Company that the scandal raises suspicions that the US security clearance system, which is supposed to engage in continuous monitoring, isn’t as up to snuff as it should be.
Everyone else
We really are that dependent on NVIDIA. If we learned anything from the chip shortage we experienced during the pandemic, the semiconductor market is remarkably concentrated, and disruptions with just one company can quickly ripple through the economy. In 2020, it was companies like TSMC, a Taiwan-based contract manufacturer that supplies chips for a host of devices. And the stock market—including pensions funds and 401ks—are deeply exposed to Nvidia stock.
“It is striking that NVIDIA, a $4 trillion company central to both the AI economy and US equity markets, appears to have no publicly identified successor to Jensen Huang,” Ann Lewis, a technology executive and former US government tech official, told Fast Company Wednesday. ‘In cybersecurity, we call this a single point of failure. A company of this scale should not depend so completely on one person’s relationships and judgment.”
