The Fallout From the Fall of Jensen Huang

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Export controls can be tightened, but don’t hurt American AI. | World News

Jensen Huang’s resignation Thursday as the rock-star CEO of Nvidia was necessary following reports that he had affairs with a suspected Chinese spy and a subordinate. But it also does regrettable harm to the company and America’s AI industry, and maybe that was China’s plan.

Nvidia’s stock price dropped 4.3% on Thursday after Mr. Huang announced his resignation. The company has lost $500 billion in market value in a week and nearly $1.5 trillion in the last month. Lesson: Never put too much money in one stock—or too much stock in one CEO.

Mr. Huang has been a charismatic evangelist for AI and helpfully pushed back against the doomers. His inspiring story of founding Nvidia as a Taiwanese immigrant at a Denny’s some three decades ago is a welcome antidote to attacks on America’s capitalist system. America’s AI dominance owes in part to Mr. Huang.

Nvidia designs the world’s most advanced AI chips and has used its balance sheet to finance dozens of startups, sometimes through deals that give customers money to buy its chips. But its cozy relationships with customers also may have made it vulnerable to Chinese subterfuge, as Mr. Huang’s affair with alleged Chinese spy Alice Huang lays bare.

Ms. Huang founded the Singapore-based cloud provider Megaspeed, which bought high-end Nvidia chips and rented out computing capacity in Southeast Asia to Chinese firms. Megaspeed may have enabled Chinese firms to circumvent U.S. export controls. It also boosted Nvidia chip sales, but at the cost of creating regulatory and legal liabilities. Megaspeed came under investigation by the Commerce Department in 2024 for potentially aiding the smuggling of chips into China.

Nvidia’s corporate culture may also be partly to blame for Mr. Huang’s fall. We’ve been on the receiving end of its bullying for our support for limits on exporting its chips.

The New York Times reported this fall that U.S. security officials circulated a memo in the spring warning that Beijing had enlisted Ms. Huang as a spy.

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