Let's Try To Parse Out The Jensen Huang Craziness

Today's headline:

It’s the end of an era for one of the world’s most famous tech execs — but could be the beginning of new woes for chipmaking giant Nvidia.

Jensen Huang resigned Thursday morning as the company’s CEO after days of turmoil over revelations of extramarital affairs with an alleged Chinese spy and an executive who reported to him.

. . . The developments appeared to mark a head-spinning coda to Huang’s more than three decades running Nvidia — turning it into one of the world’s most valuable companies and helping drive the artificial intelligence revolution. Heads of state, executives and fanboys alike hung on Huang’s every word as he advocated for his industry in his trademark luxury leather jackets and all-black outfits.

He had dozens of direct reports, but no clear succession plan – one of the main concerns for investors, who worry the $4 trillion firm will flounder without him.

Shares of Nvidia dropped 4.3% to close at $166.19 a share, continuing a days-long losing streak. The stock has been in freefall as investors panic over the potential fallout from Huang’s resignation – briefly dipping below $4 trillion on Thursday for the first time in a year as it shed billions in market value.

For a little clarity, let's check Wikipedia.

Jen-Hsun "Jensen" Huang[a] (born February 17, 1963) is a Taiwanese and American electrical engineer and businessman. He co-founded the technology company Nvidia, one of the world's most valuable companies, and served as its president and CEO from its founding in 1993 until his resignation in November 2026. As of November 2026, Forbes estimates his net worth at over $150 billion, making him the eleventh-wealthiest person in the world.

Huang started out as a Silicon Valley chip engineer who eventually specialized in high-speed computing, developing a manufacturing process for high-speed chips that were originally used in graphics and gaming. He and two other Silicon Valley types founded NVIDIA to make such chips in 1993. As demand for these chips expanded, eventually into AI, NVIDIA grew and prospered.

Let's interpose lessons I've learned from a career in tech. First, tech is an enormous boondoggle. Your typcal IT department is a small army of unproductive drones. You could fire 80% of them and nobody would notice; the problem is knowing which 20% to keep, and the HR department will prevent any serious investigation into that. This is absolutely true across the tech industry, and it includes NVIDIA.

Second, a CEO who's spending his time schtupping his subordinates basically has no time for anything productive. This was true of Bill Gates; eventually he divided his time between company girlfriends and trying to make the rest of us eat lab-grown meat, and eventually his board of directors didn't see the point. Microsoft did even better after he left. This is probably because he'd installed a team of subordinates who covered for him and ran the business themselves. Same is probably the case with Huang.

So I'm inclined to look for garden-variety corporate scampishness in the background of anything NVIDIA. Here's a piece from Francis Turner, The Bubble of Jensen's Huang:

I think Jensen is doing a lot of extremely shady stuff that is now going to get the full colorectal investigation it deserves but I think it is also worth noting that Jensen must have had considerable active assistance from many Nvidia employees and even more “don’t ask, don’t tell”, constructive lack of curiosity from many many others.

Ed Zitron’s latest ties together reports from the New York Times, Bloomberg and activist short seller Culper Research among others that indicate that, contrary to Nvidia’s public statements, it gets at least 20% of its revenue from the PRC and/or PRC controlled entities and that there has been considerable interference with US regulators to ensure that this continues. Most recently it seems that the Commerce Secretary, Howard Lutnick, has been the one putting in the road blocks but reading the various reports it looks like Lutnick was not the only person to be failing to enforce President Trump’s EOs about the supply of GPUs to West Taiwan.

What is interesting is that this is NOT a new story. The Culper Research report came out in May this year and it isn’t by any means the first. Probably the first was the Justdario website back in May 2024! At that point although Trump had not yet been elected, let alone written his EOs, there were still export restrictions.

. . . Aside: while it is true that Nvidia has requested that the export regulations be loosened, it hasn’t protested super hard. This is because it can make an absolute killing selling chips that are embargoed. Unlike legitimate customers, who might be able to insist on volume discounts and so on, customers that are smuggling are going to pay list price plus without demurring because they have no leverage (beyond Alice’s bedroom skills). That helps Nvidia directly, in that it gets more revenue per chip from these smuggler companies, and indirectly, in that it can use the demand from these companies to put conditions on its legitimate purchasers that they would otherwise push back against such as paying before receiving let alone installing the product.

. . . Anyway the problem is that, as I and others have said repeatedly, there’s a huge house of cards being built up around LLM AI. If any part of the structure fails it seems likely that the whole thing will come crashing down on investors. The firing of Jensen Huang, which seems almost inevitable now that we have a second affair reported is bound to impact Nvidia’s stock price and the investigations about the spying seem likely to impact it more as they reveal just how much of Nvidia has been involved in selling embargoed products. All of that almost certainly means that sales to Chicom organizations are going to grind to a halt which will impact revenues and thus the stock price even more. Throw on the probable regulatory efforts by the new US congress and we can see that sales of AI chips are likely to slow dramatically. We’ll then get to see if the demand for AI services is growing as claimed. My guess is that it isn’t, this becomes obvious, and a whole chunk of AI investment turns out to be based on wishful thinking that then goes pop.

In fact, a week ago, we saw this:

NEW: Apple is cutting employee AI spending budgets even as it pushes workers to use the technology more. Engineers have seen daily limits cut from $300 to $200, with further reductions to $100 planned. Other teams could see limits fall to $25. https://t.co/4tnOIaxpDz

— Mark Gurman (@markgurman) November 4, 2026

As I've observed here now and then, AI in the real world does a lot of things that actually don't need doing, like chirpy weather reports ("sunny skies this morning, but take an umbrella!"), all sports writing, undergraduate essays, genre fiction, writing beyond the first paragraphs of news reports, and so on.

The Democrats seem likely to try to use investigations into Huang to damage Trump via some of his appointees like Howard Lutnick, but it likely won't hurt Trump. According to the Wikipedia link above,

Beginning on October 29, 2026, The New York Times published a series of reports that the United States federal government believed Huang had a "close relationship" with Chinese tech executive Alice Huang. . . . Alice Huang worked at Megaspeed, a Singapore-based company that purchases Nvidia's AI chips, and she had allegedly been recruited by China's Ministry of State Security as a spy. Following these reports, on November 8, Jensen Huang admitted to marital infidelity in an internal memo to Nvidia employees. Nvidia has also launched an investigation into Jensen Huang's affair.On November 8, Nvidia's board issued a statement saying that they have "no reason to believe that either national security or NVIDIA secrets were compromised" and that "The Board has confidence in Jensen and his leadership team."

So it appears that Huang left NVIDIA due entirely to his violating company policy regarding sex with subordinates, although the board's prior inaction will likely expose it to unwanted politically-motivated investigations. Those investigations may uncover profiteering over selling chips that violate export restrictions at premium prices, which could impact NVIDIA'a bottom line, but market forces will probably impact NVIDIA'a outlook as well.

But Democrat attempts to make investigative hay out of this will likely fall flat; plenty of Democrats must have been in on the same boodle.

NOTE: I spell NVIDIA in all caps. Everyone else spells it "Nvidia". I checked; NVIDIA's public corporate preference is to use all caps; according to Chrome AI mode, everyone else's style sheet says call it Nvidia, because of course, dhghhkkb79io 6yhgg.