Rolling coverage of the latest economic and financial news
The AI poster boy, the ‘Chinese spy’ and Trump: how an affair may have harmed US security
Jensen Huang’s image has been shattered. Could he be pushed out at Nvidia?
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The fallout over Nvidia CEO Jensen Huang’s affair with an alleged Chinese spy is intensifying, after the AI chipmaking firm has been hit with a shareholder lawsuit.
According to a complaint filed in federal court in San Jose, California, the defendants misled shareholders about Huang’s alleged affair with Alice Huang , a former executive of Singapore-based Megaspeed , and did not disclose that the matter raised national security concerns that threatened Nvidia’s reputation and business prospects.
The suit also claims that Huang’s failure to disclose the affair artificially inflated Nvidia’s share price, and could have violated federal securities laws, Politico reported.
Nvidia’s share price took a knock yesterday – falling by 3.2% and cutting the company’s valuation by almost $200bn, to $4.3tn.
Huang’s reputation has taken a serious knock, after he admitted being unfaithful to his wife following reports of an affair with Nvidia customer and alleged Chinese spy Alice Huang .
As Megaspeed has been accused of illicitly smuggling and diverting restricted Nvidia chips to China, the ramifications are serious.
Donald Trump weighed in over the scandal yesterday, telling reporters:
double quotation mark “I asked him [Mr Huang] about that and he said he had absolutely no idea that the person in question was a spy.”
Trump also told a news conference that the US Federal Bureau of Investigation was involved in the case, saying:
double quotation mark “We’ll look into it. I know the FBI is looking into it in terms of something else.”
8am GMT: Worldpanel UK supermarket inflation data
From 9am GMT: Bank of England Watchers’ Conference in London
11am GMT: NFIB index of US business optimism
1.30pm GMT: US inflation report for October
The spy scandal could cost Jensen Huang a place on Donald Trump’s delegation to theAsia-Pacific Economic Cooperation summit in China next week.
According to the South China Morning Post , Nvidia chief Jensen Huang had been in talks to join Trump on the trip, but his participation is now in doubt after he admitted his affair last weekend and Nvidia launched an investigation.
Other top US business leaders, including Tesla and SpaceX chief Elon Musk and Mastercard’s Michael Miebach , are expected to travel with Trump.
double quotation mark Sources told the SCMP that Musk, Miebach and Huang were among the executives the US president planned to bring to China. All three accompanied Trump on his state visit to Beijing in May.
Away from the crisis at Nvidia, a deputy governor of the Bank of England has warned that young people in Britain are bearing the brunt of a “low-gear economy”.
Clare Lombardelli told the Guardian that employers are holding back from hiring amid the fallout from the war in the Middle East.
But…that higher unemployment may not not necessarily bear down on inflation. If employers only hire for positions they found harder to fill, there will still be pressure to offer higher pay deals to recruit.
double quotation mark “You can have higher unemployment without it exerting a downward pressure on inflation.
She is expected to use a speech in London this lunchtime to warn that the breakdown in hiring in Britain’s jobs market is among reasons to fear that inflationary pressures could become entrenched in the economy.
City analysts are weighing up the potential impact of the Nvidia scandal, and pondering whether it could cost Jensen Huang his job.
Ipek Ozkardeskaya , senior analyst at Swissquote , points to the company’s crucial role at the heart of the AI boom:
double quotation mark One reason Nvidia fell so much is that it has positioned itself as the mascot, the face of the AI trade. The company is at the epicentre of the AI boom, with the most powerful—and premium—product range, financial deals, investment support and broader commitments involving many companies to keep orders coming. And CEO Huang has been a central figure at Nvidia: besides having a far-reaching vision of what AI will look like—and therefore staying a step ahead in terms of business decisions—he has also been involved in politics and helped shape decisions regarding the White House’s China policy within the broader technology war.
The risk is: if he has to leave, who will replace the man in the black leather jacket, and what will the broader implications be for Nvidia’s sales, earnings and its ecosystem ? His departure remains hypothetical, however, and Nvidia’s board has expressed confidence in his leadership while launching an independent investigation.
Terri-Leigh Bennett, chief operating officer at CMS Prime, warned that the “leadership crisis” at Nvidia is threatening the most important company in artificial intelligence
double quotation mark Nvidia’s approximately 4.27% decline toward $178–$179 [yesterday] was a striking rejection of the broader semiconductor recovery. While competing chipmakers advanced, Nvidia fell to its weakest levels in months as investors confronted allegations surrounding chief executive Jensen Huang and a potential foreign intelligence effort.
The board launched an independent investigation following reports involving a Chinese business executive alleged to have intelligence connections. Huang acknowledged a personal relationship and pledged cooperation; Nvidia maintained that no evidence indicated confidential information had been compromised.
Volume reportedly approached 3.7 times normal. The issue is not simply the allegations but the degree to which Nvidia’s valuation depends on confidence in one leader.
AJ Bell head of financial analysis Danni Hewson says:
double quotation mark “Jensen Huang is the heart of Nvidia. His hand has been firmly on the tiller as the small-time chipmaker morphed into the AI behemoth it is today.
“His vision is seen by many as a key factor in the company’s stellar growth and there are huge question marks about how it will navigate the coming days, especially if Huang is forced to consider his position.
“Whilst Nvidia’s products and relationships with other big players should limit any gains competitors are able to make in the short term, this could present a huge opportunity if the uncertainty continues into the new year.”
US senator Chris Coons is calling for a congressional investigation into Nvidia and CEO Jensen Huang .
Posting on X, Coons – a Democrat – says:
double quotation mark I’m pushing to investigate Jensen Huang and Nvidia to determine whether our national security was compromised. We need answers about the relationship between AI billionaires and the Trump administration, who’s making these decisions, and who’s really got their hand on the wheel.
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The fallout over Nvidia CEO Jensen Huang’s affair with an alleged Chinese spy is intensifying, after the AI chipmaking firm has been hit with a shareholder lawsuit.
According to a complaint filed in federal court in San Jose, California, the defendants misled shareholders about Huang’s alleged affair with Alice Huang , a former executive of Singapore-based Megaspeed , and did not disclose that the matter raised national security concerns that threatened Nvidia’s reputation and business prospects.
The suit also claims that Huang’s failure to disclose the affair artificially inflated Nvidia’s share price, and could have violated federal securities laws, Politico reported.
Nvidia’s share price took a knock yesterday – falling by 3.2% and cutting the company’s valuation by almost $200bn, to $4.3tn.
Huang’s reputation has taken a serious knock, after he admitted being unfaithful to his wife following reports of an affair with Nvidia customer and alleged Chinese spy Alice Huang .
As Megaspeed has been accused of illicitly smuggling and diverting restricted Nvidia chips to China, the ramifications are serious.
Donald Trump weighed in over the scandal yesterday, telling reporters:
double quotation mark “I asked him [Mr Huang] about that and he said he had absolutely no idea that the person in question was a spy.”
Trump also told a news conference that the US Federal Bureau of Investigation was involved in the case, saying:
double quotation mark “We’ll look into it. I know the FBI is looking into it in terms of something else.”
8am GMT: Worldpanel UK supermarket inflation data
From 9am GMT: Bank of England Watchers’ Conference in London
11am GMT: NFIB index of US business optimism
1.30pm GMT: US inflation report for October
