The resignation of Jensen Huang , together with the results of the recent congressional election , could make this a watershed moment in the relationship of American business to government, one that sees the pendulum swing back toward greater regulation and greater separation of finance from politics.
Corruption topped the list among issues that motivated voters in the overwhelming and nationwide midterm election victory for Democrats, according to the CNBC Voter Poll. It showed 90% identified corruption as a crucial or major issue in their voting decision, a percentage point higher than the cost of living.
When voters were asked which party was best able to deal with the corruption issue, Democrats led Republicans 37% to 30% — though, significantly, 32% said neither party.
It's impossible to know exactly what voters mean when they say corruption, but there are hints it involves the relationship of business to government. The CNBC All-America Economic Survey, taken two weeks before the election, asked respondents if elected officials, including the president and members of Congress, should personally own or trade stocks in companies that have contracts with the federal government. An overwhelming 93% said it should not be allowed . A similarly bipartisan 89% objected to the president's family members receiving government contracts.
The upshot: The very close relationship between business and the government, which has existed under both political parties but has come plainly and brazenly to the fore in President Trump's second administration, is now a major issue for voters.
The Huang affair encompasses all of that. Nvidia, along with several other large corporations, made large donations to the president's ballroom . Meanwhile, there are allegations that the administration did not act when informed of potentially illegal sales of Nvidia chips to China. It may be that the president ignored warnings from inside his own administration that Huang was involved with a woman who was reportedly a potential Chinese spy , instead bringing Huang on a state visit to China and giving him say in U.S. export policies for chips.
The Trump era has seen the virtual creation of the CEO Statesman: Huang and other tech execs draped around the president during foreign trips, Jared Kushner and Steve Witkoff negotiating with Russia , Elon Musk deciding who the federal government fires.
Could the Huang affair be the end of that phenomenon?
Sen. Elizabeth Warren , D-Mass., wasted no time in signaling the new Congress was ready to get tough on tech execs.
"It's clear that the American people cannot rely on Big Tech billionaire CEOs to put our national security above their bottom line – which is why Congress must pass the AI Overwatch Act and other bipartisan bills to keep advanced American AI technology out of China's hands."
The enormity of Huang's fall cannot be overstated. Imagine J.P. Morgan resigning — or Jack Welch or Steve Jobs or Tim Cook. Few have stood astride the pinnacle of political and corporate power during their era like Huang during the AI boom.
This comes at a time of massive wealth increases for the elite that have helped undermine faith in capitalism. The CNBC Voter Poll showed 56% with a strong or somewhat favorable opinion of capitalism, with 32% reporting an unfavorable opinion and 12% saying they don't know.
But those numbers are overwhelmingly driven by older Americans. Younger Americans, ages 18 to 34, have a deeply negative opinion. Those aged 35 to 49 are favorable toward capitalism by only a 46%-41% margin.
For starters, it could result in a return to more traditional separation of business and politics, where business has less of a direct say in policy. But this could be the start of a more significant change.
In the wake of the Great Financial Crisis, the banking system was put under such strict regulations, many of which exist to this day, that one commentator remarked it was "in receivership in everything but name only." One can go back even further to more extreme measures taken when the public was deeply dissatisfied with business — to the fallout from the robber baron era when the trusts were busted up, or the wake of the Great Depression when the government put stricter regulations on banks and Wall Street and gave unions more power.
Democrats will be limited, even with large gains in both houses, in their ability to overturn presidential decisions with veto-proof majorities. But executives themselves may decide that it's not a good look any longer to be seen being too cozy with the White House. And some Republicans, especially those from swing states, may read the change in the electoral winds and side with Democrats on some of the most populist issues, like the data centers, the environment and even regulation.
The irony is that Trump ran, among other things, on a strong deregulatory agenda, one that business welcomed as unshackling overregulation during the Biden administration. With potential support from the public, and an overwhelmingly Democratic Congress, the pendulum may be about to swing the other way.
