There have been rumors for a little while that Jensen Huang, the CEO of Nvidia, was having a romantic relationship with a Chinese spy. He’s now confirmed that he was having an affair while the spy label seems likely but is currently unconfirmed. Here are my thoughts on the subject:

 

• When Raji Khabbaz and I were running Silver Arrow, the question he’d always ask me was “Is this a market event?”. It’s the right question and forces the conversation to focus on how something would affect the stock market and our positions. Nvidia is 7% of the S&P 500 and the most prominent player in the gigantic AI trade. The company has ownership in or financial agreements with many/most of the other significant players in the space. Huang is one of the best CEOs in the industry, and there is no obvious person who’d be next in line and almost as good. If he were forced to step down, it would indeed be a market event. It could start to unravel the AI trade in a way much more severe and significant than we saw last week. The NASDAQ would be down with the Nikkei down more and I think Korea would suffer the most.

 

• I think it’s unlikely that he is removed from his position. While he exercised terrible judgment in this matter, everyone involved knows that he’s a visionary CEO and that there’d be market carnage if he were fired.

 

• Another reason I think he’s unlikely to be removed is that yesterday, the Nvidia Board announced publicly they’d investigate. However, last year, Huang engaged a firm which specializes in sex scandals and asked Nvidia insiders to Cc this PR firm on related matters. That means Nvidia insiders have known about the affair for a year and that the most likely reason for the current investigation is less related to actual facts and more related to the public disclosure.

 

• All of this makes me think he’s unlikely to be replaced. However, if an investigation reveals that Huang knowingly passed on meaningful information to a Chinese spy or was sending messages to the CCP through his mistress, then he’ll be fired, potentially jailed, and this becomes a major market event. Yes – one person can matter that much.

 

• The thing that keeps grabbing my attention is how careless Huang was. There were photos of him and his mistress together in public over a multi-year period starting years ago. He barely seemed to hide the affair. This wasn’t cloak and dagger “bring her in the service entrance”; but rather, was one of the most recognizable men in the world having dinner in public and taking photos in a honeypot trap. Further, it seems that journalists and short sellers were able to uncover this woman’s connections. Huang has a security detail. Why didn’t he have someone look into her background?

 

• More on the previous point: DKI isn’t anywhere close to Nvidia in size and market importance. Not even in the same league. But there are people on the DKI Board of Advisors who are on CCP watchlists. On occasion, I’m approached by someone either through normal business channels or socially in a way that makes me suspicious. I wonder what their real intentions are. Huang is an experienced and adept political actor with access at the highest levels. If I were him, I’d have security vet everyone who wanted to get close. Some of you reading this now are in positions of influence. Please be careful of who you allow into your inner circle or into your intimate life; especially if you’re married!

 

• The Epoch Times is tying the story to China’s “Singapore washing” effort. Chinese firms are setting up companies in Singapore to buy Nvidia products not permitted for sale in China. I wrote about this back in January of 2025 when the DeepSeek news shocked the market. DeepSeek claimed they didn’t use the best most expensive Nvidia processors. I expressed doubt about that noting that the Nvidia GPUs were small, light, valuable, and difficult to track. It was clear that GPUs were being shipped to Vietnam and flown to China from there.

 

• Some people are trying to tie China’s desire for Nvidia GPUs to Huang’s advocacy to sell there claiming he was compromised by his mistress/spy. I’m not sure on that. Besides the fact that I’ve been saying for two years that the trade limitations are not effective in stopping GPUs from reaching China’s LLM developers, Huang’s argument on China’s workaround is sound. He claims that if China doesn’t receive (and become dependent upon) US technology, they’ll just develop their own. Last week, we saw the news that a Chinese computer company which had been denied Intel processors just produced a computer made entirely with Chinese components. Huang making an obvious case and also advocating for his own company isn’t enough to conclude that he was compromised.

 

• As of now, here’s what I think is the most likely outcome:

 

• Huang keeps his job.
• No major effect on Nvidia.
• Huang’s political influence is limited.
• China suffers from this incident in no way. They’ve been infiltrating our universities, businesses, and Congress for years. From what I can see, there’s no serious effort being made to stop them.
• If China’s goal was to get Nvidia processors, this hurts them. If their goal was to weaken the most prominent CEO in the US, this helps them.
• I’ll revise my opinion as more information becomes available.

 

• Update number 1: Some are reporting that a US investigation into Megaspeed (the company where the Chinese spy worked) was halted after Huang intervened. If true, then start to weight more heavily the disaster scenario outlined above. Also, if this is true, then expect there to be more “issues” as the investigation proceeds. In situations like this, when a CEO who’s hiding something gets replaced, it’s likely that he was hiding more than one thing.

 

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