Why Nvidia’s Nightmare May Be Just Beginning
Submitted by QTR's Fringe Finance
Just to put a bow on the Jensen Huang saga, before this story broke in a big way, I wrote that investors should be preparing for more bad news across the AI trade. I still believe that’s the case, and arguably more so now than I did a few days ago.
Just hours after I raised the question of whether Nvidia CEO Jensen Huang could be forced to resign…a possibility that virtually nobody seemed to be discussing at the time…Huang publicly admitted to an extramarital affair with Alice Huang, a Chinese businesswoman now at the center of allegations involving Chinese intelligence and Nvidia’s chip sales.
Over the last several days, prediction markets have started taking the possibility of Huang’s departure more seriously, with the implied odds of his resignation by March of 2027 move to about 15%. And as I wrote on Sunday:
And lest we forget…I’m getting ahead of myself here, but that’s what I do….there’s also the uncomfortable reality that major executive departures can sometimes bring previously concealed problems into the open.
New leadership, new scrutiny, and changing incentives have a way of revealing things that were previously swept under the rug.
Well, we haven’t even gotten to the executive departure yet, and the questions are already getting considerably more uncomfortable.
Because this morning The Information reported that Huang’s affair with Alice Huang allegedly helped facilitate at least $7.5 billion in Nvidia chip shipments to Chinese firms.
According to the report, Alice Huang, along with her husband and sister, built a network of companies across China and Singapore to acquire Nvidia chips.
At the center of that network was Shanghai Century Litong, a Chinese company founded in June 2023 that reportedly secured preferred cloud partner status with Nvidia just four months later, giving it priority access to chips.
When U.S. export restrictions complicated orders, Alice Huang allegedly used her connections to Nvidia and its distributors to secure supplies, helping move approximately 240,000 H100, H200 and A100 chips into China.
That’s not a rounding error. And it’s certainly not just a story about a CEO’s personal life anymore, if you ask me…(READ THIS FULL ARTICLE 100% FREE HERE).