The man at the center of the world’s most powerful tech company enjoyed close proximity to President Donald Trump and his top allies, but those relationships have quickly shifted from being an asset to a liability.
Nvidia’s longtime CEO Jensen Huang resigned on Thursday in a cloud of controversy after reports of multiple extramarital affairs, including with a suspected Chinese spy, which Beijing denies. Huang built his company from a small chipmaker servicing video games in the early ‘90s to the dominant supplier of the modern AI industry. The likes of OpenAI, Anthropic and virtually every major player in artificial intelligence relies on his technology– making it an ideal target for bad actors.
“Jensen Huang is literally the man who led the AI boom,” said Lizzie C. Lee, an analyst of China’s economy at the Asia Society. “This happens at a critical juncture when markets are already questioning the sustainability of massive AI spending. His resignation could ripple across the AI ecosystem.”
Huang’s close relationship with Trump is now the subject of serious scrutiny in Washington. At the heart of the uproar was a decision by the president last year to allow China to purchase advanced microchips from Nvidia and other U.S. companies despite national security concerns. At the time, Huang was an influential player in White House AI policy and a recent $25 million donor to Trump’s prized ballroom project.
Two of Trump’s closest aides— Secretary of State Marco Rubio and Commerce Secretary Howard Lutnick— are also under a microscope. Members of Congress from both parties are now demanding testimony from both officials about whether the administration put private interests ahead of national security. The FBI is also investigating the matter, Trump says.
A Department of Commerce spokesperson told MS NOW, “Secretary Lutnick has proactively agreed to appear voluntarily before the Banking Committee to address their questions.”
In a message to Nvidia staff Huang offered his apologies, saying “I owe my family and all of you an apology.” Nvidia said on Monday that it launched an independent investigation into whether company secrets or national security were compromised. “I am committed to protecting NVIDIA and supporting America’s national security,” Huang added.
“Did they not do a thorough vetting of Huang and his associates because he gave $25 million to Trump’s ballroom?” said one Democratic House lawmaker, who requested anonymity to speak candidly. “The feeling is that the White House is not taking national security risks seriously enough.”
Rubio, who also serves as Trump’s national security advisor, was the one who initially briefed Trump on the finding that Huang was connected to a Chinese spy, while Trump was en route to China in May, according to a U.S. official, granted anonymity to discuss sensitive intelligence information. The New York Times first reported Rubio’s warning, which Trump later denied.
Asked about calls for Rubio to testify, the White House referred MS NOW to the State Department. In a statement to CNBC, a White House official said Trump maintains “complete confidence” in Lutnick to “carry out the position as the most transformative Commerce Secretary in modern history.”
Alice Huang, a former executive at Singapore-based chip buyer Megaspeed, was allegedly the Chinese asset engaged in a relationship with Huang. Her company, which recently retained a law firm, was accused of helping China to evade export control rules.
House Speaker Mike Johnson, R-La., a close Trump ally, said there is a “developing consensus” that limiting export controls on chips to China “is an important position to take,” adding that it “has been a big issue” on Capitol Hill. The bipartisan Select Committee on China is explicitly pushing for new restrictions in the next National Defense Authorization Act.
Lawmakers are also seeking answers for why– after intelligence already showed he was the subject of a Chinese espionage campaign– he was still permitted to speak with Trump by phone, travel to the White House for meetings, and even travel aboard Air Force One for an hours-long flight to China. Huang has agreed to testify before Congress.
Miles Taylor, a former Department of Homeland Security official, said Huang should’ve never been allowed to travel with Trump, especially to an adversarial country that in this case was targeting U.S. interests. He said the federal government should’ve opened a full-scale counter-espionage investigation, but there’s no sign that such a process has begun.
Taylor explained that there are “any number of ways that the Chinese might have potentially exploited that relationship beyond just, ‘Help us, get more chips,’” including possibly obtaining information that could compromise the U.S. chips supply chain. “There’s just a whole host of scary roads this could have gone down.”
The plummeting price of the company’s stock on Thursday sparked a discussion on Wall Street about the risks of relying on one company for specialized AI hardware. One estimate put Nvidia hold on gadgets at around 80% of the market, according to an April report by Silicon Analysts.
“This is a time to reflect on whether or not there needs to be more robust competition in this marketplace,” said Brookings Institution’s Nicol Turner Lee, who leads the think tank’s Center for Technology Innovation.
Trump has stressed the importance of maintaining America’s competitive edge over China in artificial intelligence. “We’d be in bad shape,” he told conservative commentator Hugh Hewitt on Thursday when asked about the consequences of falling behind.
Meanwhile, reacting to the ousting of Huang, the president said it was “so sad to see that happen.”
Democratic Minority Leader Hakeem Jeffries, who is likely to become the next House speaker, said a classified briefing should be available to all members of Congress on the findings of Huang’s affair.
“There certainly are more questions than answers,” Jeffries said. “The American people deserve answers, and we’re going to work to make sure that happens.”
Felicia Schwartz contributed to this report.
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