The Jensen Huang scandal is hardly over

A second affair has hit the news cycle, but that’s not what matters here. A second affair has hit the news cycle, but that’s not what matters here. I was certain, until the story of Jensen Huang’s second affair hit, that Huang was bulletproof. After all, why wouldn’t he be? He’s placed himself indispensably at the center of the AI industry and famously had no succession plan at Nvidia. In fact, he’s the only CEO Nvidia has ever had.L’état c’est moi. Then two stories were published nearly back to back on Wednesday: one alleging Huang had an affair with his subordinate Kimberly Powell, another that the board was meeting to consider his ouster. First thing Thursday morning, Nvidia announced Huang had resigned. One of the most powerful men in Silicon Valley was out. Why throw Huang under the bus for getting his nuts drained? Fascinating. First of all, when I asked on Monday “Who else is Jensen Huang fucking?” I did not expect to get answers this fast — somebody, potentially somebody on the board (as we’ve seenin otherincidents), wanted the story out there. Second, why throw Huang under the bus for getting his nuts drained? This is not an industry that cares about that kind of thing — just ask Eric Schmidt and Bill Gates. My guess is that the second affair is a pretext for action, and this all goes back to the original story from last week: that Huang was honeypotted by an alleged Chinese spy. Whatever was going on with neocloud Megaspeed might be much, much worse than we know, andwhat we know is pretty bad: business listings that led to “a Malaysian data center and shopping mall, a near-empty office in Singapore and a dilapidated storefront outside Kuala Lumpur.” Even months before the report that Alice “No Relation” Huang, an exec at Megaspeed, was having an affair with Huang, there were questions about Nvidia’s business in China. The US government has placed strict export controls on Nvidia’s high-end chips. Huang claimed in May that as a result, Nvidiahas zero percent market share in China. But also in May,short sellers Culper Researchpublished a report in which they wrote, “We believe that in reality, over 20% of Nvidia’s FY 2026 compute revenues remained driven by China – supported both by illegal GPU diversion and Southeast Asian intermediaries.” Megaspeed was Nvidia’s largest Southeast Asian buyer, but Singaporean newspaperThe Straits Timesvisited Megaspeed’s Singapore office a month agoto find “no signs of activity.” Another building tenant told the reporters, “It is always dark for as long as it has been here. I hardly see anyone visiting or in the office.” The sole director of Megaspeed, Tan Yong Pong,appears to have vanished. The Singaporean company that owns Megaspeed, Swiftdata, haslisted an office that belongs to an interior design firmas its business address. Megaspeed is only part of the story Incidentally, Alice Huanghas surfaced in Beijing. TheFinancial Timessays she’sbarred from Singaporefor giving police “inaccurate information.” Oh, and reportedly her companiesinvested in Chinese AI company DeepSeekand promised them Nvidia’s Blackwell chips? Fun! Megaspeed is only part of the story, I think. There are two Chinese chip-related scandals that could cause serious problems for Nvidia, and both feature people with close ties to Huang. One is Megaspeed, which involves Huang’s maybe-spy affair partner. The other centers on Super Micro (which, horribly, does business as Supermicro), a partner of Nvidia run by one of Huang’s old friends, Charles Liang. Super Micro’s cofounder, Yih-Shyan “Wally” Liaw, along with Ruei-Tsang “Steven” Chang and Ting-Wei “Willy” Sun,allegedly defrauded the USby serving as a passthrough for a front company to buy $2.5 billion of Nvidia chips for Alibaba. The front company, not named in the indictment, isThailand-based OBON, according toBloomberg. Liang and Super Micro have not been charged. But these incidents may not be the end of Nvidia’s problems. Take for instance, more recently, New Matrix —another company that barely exists, and yet is an approved buyer of Nvidia chips. It is, in fact, one of several approved companies that “have ties to firms that have been blacklisted by the U.S. government, or that work as military contractors in China,” according toThe New York Times. The question, of course, is how high this all goes Huang has insistedthat Nvidia has seen “no evidence of any AI chip diversion.” He’s beenpretty emphatic on that point, actually. I am now wondering if that is even a little bit true. If the board is cutting Huang loose, there’s probably more on chip smuggling allegations coming. More substantively, Nvidia reportedly intervened in a 2025Commerce Department investigation of Megaspeed, which was suspected of smuggling Nvidia chips — halting the investigation. Since the scandal broke, Commerce Secretary Howard Lutnick appears to have become the fall guy for this, withAxiosreporting that TreasurySecretary Scott Bessent “confronted” himabout failing to note Megaspeed as a national security concern andPoliticosaying “more than half a dozen Republicans have demanded answers” from him. The question, of course, is how high this all goes. After all, Huang was awfully buddy-buddy with President Donald Trump, who wasinformed about Huang’s maybe-spy girlfriend in 2025and apparently did nothing about it. Incidentally, Nvidia hasreportedly donated $25 million to Trump’s planned ballroom. This is whatgangster tech regulationlooks like. I wonder what else was an open secret at the company, you know? Come January, Elizabeth Warren will be able to send subpoenas in her role as the chair of the Senate Banking Committee. And wouldn’t you know,she seemsto bepretty interested. Democrats will control both the House and the Senate. Their voters have given them a mandate to root out corruption. And boy howdy, does Nvidia look like a sitting duck right now. If Huang knew chips were being diverted — or had reason to know that — and tried to ensure their sales anyway, he may have committed actual crimes (bribery, espionage, smuggling, whatever) and, under a functioning legal system, could actually go to jail. Nvidia dispensing with its indispensable CEO is the company reducing its risk of getting roped into Huang’s drama. Will it be that easy for Nvidia? I wonder. Themost interesting part of the second affair story, with Powell, the Nvidia vice president of healthcare, comes at the very end of theNew York Timesarticle. When someone took a video of Powell and Huang being “affectionate” in March, Huang’s security had nondisclosure agreements ready to go. CNBC reports thatrumors of their affairhave circulated “for years.” I wonder what else was an open secret at the company, you know? Especially since Huang had 60 direct reports, so every part of the company is covered in his fingerprints. Over in the tech world, people still seem to be in denial. On X, the social network for Trumpist dead-enders, the account “zerohedge” posted, “Elon please hire Jensen.” Elon Musk replied, “That would be an honor.” A free daily digest of the news that matters most. This is the title for the native ad