What was Jensen Huang thinking?

The world currently understands this week’s Jensen Huang story as a sex scandal, but the real engine of the drama may start much earlier. With a fight between Jensen Huang and Joe Biden, in 2022. This week, the story and the backstory. Reporting from The Information’s Leo Schwartz https://www.theinformation.com/articles/nvidia-uses-soft-power-influence-customers-shape-policy The Thinking Machine https://www.penguinrandomhouse.com/books/757558/the-thinking-machine-by-stephen-witt/ by Stephen Witt Check out the new Search Engine merch https://merch.ambientinks.com/collections/searchengine Sign up to be an Incognito Mode member https://searchengine.supercast.com/#subscribe

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• 3:22Speaker 00

  By now, you've almost certainly heard the news. Nvidia CEO Jensen Huang announced to his company that he had an affair, that he cheated on his wife with a woman who the US government believes to be a Chinese intelligence asset. There's a lot we don't know. There's a lot we're still learning. But the big question is just this. What was he thinking?

• 3:45Speaker 00

  Jensen Huang's reason for being for years has been to make Nvidia the dominant graphics chips company in the world. And he had succeeded so well at this one job that the entire US economy is right now uncomfortably yoked to Nvidia's future. A future that has become shaky in ways that were unimaginable just a week ago. Jensen has also done this at the exact moment that the American public's anger about data centers, about the rush towards AI development, is at its height, when concerns about corruption are at an all-time high. Everything about this story screams that it will be a huge ongoing scandal in the months to come. What was he thinking?

• 4:25Speaker 00

  A lot of the coverage so far has tried to answer that question by looking at Alice Wong, the woman Jensen had an affair with. I suspect the better way to understand this story is by looking at what has always been Jensen's biggest desire, which is to sell as many Nvidia chips as possible. China is an enormous market. The US government has tried to restrict Nvidia's ability to sell chips there because it believes that the country whose labs have the best chips will win the AI race. Jensen believes the government is wrong to block him. The fight is very important to Jensen. He's done a lot in public to try to win it. And the questions this year are going to be, what did he do in private to win it? And did he knowingly break the law? Because billions of dollars worth

• 5:07Speaker 00

  of Nvidia's chips have been reaching China, allegedly through the woman he was seeing. That's what the core of the scandal is going to look like, once people's interest in the sex part of it boils off. So that's where we'll spend the bulk of our attention today. Let's get into it.

• 5:24Speaker 00

  On Monday, I spoke to Leo Schwartz, a reporter for The Information. Leo covers export controls, the rules the government sets around where US companies are allowed to sell their products overseas. When we spoke on Monday, he admitted he is not used to so many people clicking on his stories. Like, you were on a beat. It wasn't sleepy, but you were on a beat that prior to this was like, took, you had to do more work to make people interested in it.

• 5:49Speaker 01

  Yeah, I don't think export control policy is always the sexiest of subjects. I actually had a former White House official tell me last week that maybe 20 people in the world cared about export control policy. I think that is rapidly changing, especially because now you have so many of the most powerful people in the world drawn to this. Jensen, of course, Trump, who has been one of Jensen's main allies in DC, along with David Sacks. And then this question of whether Nvidia was either motivated by Chinese intelligence, or at least was leaking secrets potentially inadvertently through this relationship that just got unearthed.

• 6:28Speaker 00

  So to step back, everything that we learned this week, I believe, is a direct consequence of something very boring sounding that happened way back in 2022, during Joe Biden's presidency. An export control rule change. Every other podcast this week is going to tell you this is a story about sex because they think you think sex is exciting. But what it's really about is how on October 13, 2022, the Federal Register issued a new rule called, quote, "Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Item of Supercomputer and Semiconductor End Use Entity List Modification." Because what that rule meant in English is that American companies like Nvidia were banned from selling their most cutting-edge chips to China, which for

• 7:11Speaker 00

  China meant their AI companies were now locked out of the best chips.

• 7:16Speaker 02

  It is the latest source of tension between the United States and China. President Joe Biden is accused of weaponizing technology for imposing sweeping controls on sales of semiconductors to Beijing. What's behind this decision and how much is it down to politics? This is inside story.

• 7:34Speaker 00

  This was moments before the AI race took off, weeks before ChatGPT 3.5 took the world by storm. And so most Americans at the time could be forgiven for not having strong opinions about semiconductor policy. But Joe Biden's administration really did.

• 7:49Speaker 03

  China is trying to move ahead of us in manufacturing. It's no wonder, literally, the Chinese Communist Party actively lobbied against the Chips and Science Act that I've been pushing in the United States Congress.

• 8:02Speaker 00

  Biden's desire to keep American chips out of China wasn't just a headache for China, it was also a headache for Nvidia. In 2022, sales to China had accounted for a quarter of Nvidia's revenue. To the Biden administration, the trade-off was clearly worth it.

• 8:16Speaker 03

  The United States has to lead the world in producing these advanced chips. This law is going to make sure that it will.

• 8:22Speaker 01

  There was a concerted effort in the Biden administration, starting in 2022, when there was more awareness or visibility in DC and in the Biden administration that an AI arms race was starting and that it would be between the US and China. And at that point, there was an effort within the Biden administration, led by different tech advisors there, to create export control policy to ensure that the most advanced chips, again, mainly from Nvidia, weren't making their way to China.

• 8:51Speaker 00

  And so how does Jensen Huang initially react when this ban comes down?

• 8:56Speaker 01

  So our reporting showed that at the time Nvidia, which you have to remember, didn't start out as an AI company. Really, their chips were mostly used in gaming. And it just happened to be the case that when AI really exploded into the tech scene, it turned out that Nvidia chips were the best suited to train these models. So at that time, around 2022, Nvidia had a very bare bones government team in DC. And what we've been told by people who are working on AI policy at that time is that they were really taken by surprise by this development. And they had to build up their government relations team when they realized that one of their big business lines of being able to export chips externally was being threatened.

• 9:37Speaker 04

  Nvidia shares sinking, hitting a new 52-week low, on news that the US government is imposing new restriction on sales of its chips to China.

• 9:45Speaker 05

  China's a major market. How does Washington thread this needle?

• 9:50Speaker 06

  It's absolutely.

• 9:50Speaker 00

  So why were they, when this ban comes down, though, you're describing this company that was not used to having to figure out how to sort of lobby the government to be allowed to get around export bans because people are not doing export bans of video game chips? Like, nobody cares if other countries can play really cool video games. The Biden administration understands this is going to be like the raw material of the AI race. What is Nvidia's like, like, they start spinning up the ability to to sort of fight back on this. But what was the argument they were making? Like, what was Jensen Huang saying in 2022 to the Biden administration, to others about like, why he should be able to sell these chips to China?

• 10:32Speaker 01

  There's been several different arguments that Nvidia has employed over the years. I think one really crucial one is basically saying Chinese chips from Chinese companies like Huawei aren't actually that worse than Nvidia.

• 10:44Speaker 07

  What's your reaction to the Wall Street Journal saying Huawei is advancing to catch up to your highest level of chips?

• 10:52Speaker 05

  There's no question that Huawei is one of the most formidable technology companies in the world. And they're incredible in computing. They're incredible in networking technology and software capabilities. All of the essential capabilities to advance AI. And they have, they've made enormous progress in the last several years.

• 11:10Speaker 00

  In Jensen's public statements, he'll claim China is about to unseat Nvidia's chips, like, any moment. Making this decision to cut him off from their consumer market, pointless.

• 11:20Speaker 07

  Like, how far behind do you think China is?

• 11:24Speaker 05

  China is not behind. Are they ahead of you? China is right behind us. I mean, we're very, very close. But remember, this is a long...

• 11:34Speaker 01

  And another argument is essentially saying, if AI super systems are going to be built around the world, don't you want them being built by US companies and giving US companies the edge here?

• 11:46Speaker 05

  Why would we not allow this industry to go compete for its survival? For this industry to go and proliferate the technology around the world so that we could have the world be built on top of American technology? So that we can maximize our economic success, maximize our geopolitical influence, maximize this technology industry during such a vibrant time, such a pivotal time, to allow it to thrive?

• 12:12Speaker 01

  Otherwise, China is just going to build up their own very capable chips systems. And, you know, US companies are going to lose out on all that money and also probably on a lot of soft power by having the hardware actually made in the US, which, as you can tell, are probably somewhat competing arguments, along with a third one, which was as more and more chips were being used in China for AI capabilities, that chip smuggling wasn't actually dynamic and that it was largely impossible to do.

• 12:40Speaker 05

  Governments understand that diversion is not allowed. And there's no evidence of any AI chip diversion. They'll recognize our data center GPUs are massive. These are massive systems. The Grace Blackwell system is nearly two tons. And so you're not going to be putting that in your pocket or your backpack anytime soon. And so these systems are fairly easy.

• 13:04Speaker 00

  That last clip particularly striking. Jensen publicly saying, "Chip diversion, chip smuggling, doesn't happen." That there's no evidence of it. Chip smuggling is what this story, again, I think, is really about. Back during the Biden administration, the White House was worried that despite the new rules it had passed, China was somehow still getting its hands on smuggled, cutting-edge Nvidia chips. But Nvidia, at the time, was adamant, saying nothing like that was happening. According to the information's reporting, Biden officials would have these strange meetings with Nvidia's leadership. The White House would ask for help making sure that there weren't technical workarounds that Chinese AI companies could use to, for instance, hack together older Nvidia chips into something cutting-edge.

• 13:49Speaker 00

  But in these meetings, it was as if Nvidia didn't really want to help. Nvidia would not, quote, "productively engage." What we now know is that around the same time, Jensen was in some kind of a relationship with Alice Wong. Her web of companies would become a place you could go to if you had an AI lab in China and wanted to get these Nvidia chips the US was trying to keep away from you. At least $7.5 billion in Nvidia chips would pass from Alice Wong's companies to other Chinese companies. We know that now, but back then, that was a secret. All anybody seemed to know was that the Biden administration wanted to keep Nvidia's chips out of China and that Nvidia was being unhelpful. That was the status quo. Until 2025,

• 14:32Speaker 00

  when Nvidia gets an enormous gift from the heavens: a new opportunity to try to change this export control policy the company hates so much.

• 14:42Speaker 05

  Ladies and gentlemen, the President of the United States.

• 14:46Speaker 00

  The second Trump presidency. Just a few months in, Trump gives a press conference at the White House, showing off his new collection of supplicating business titans.

• 14:55Speaker 07

  Well, thank you very much. Please, sit down. Please, thank you. We have a lot of great political leaders and the biggest political leaders around, I guess you could say. But by far, much bigger are the business leaders. It's not even close. I say that to my friends.

• 15:12Speaker 00

  There, in the room with his trademark silver poof, dressed for once not in his leather coat, but instead in a suit and tie, Jensen Huang. They're such new friends. You notice Donald Trump has not yet learned how to pronounce Nvidia, but he does seem to understand what he has.

• 15:27Speaker 07

  And one of the most brilliant men that you'll ever meet, the man that's done in a short period of time something that is incredible. He's the founder, CEO, and president of Nvidia, Jensen Huang. He's producing up to $500 billion over the next four years to manufacture the most powerful AI chips entirely in the USA for the first time ever. Jensen, would you come up and say a few words? This is a smart cookie.

• 16:00Speaker 05

  Thank you, Mr. President. It's a great honor to be here. Nvidia reinvented computing for the first time after 60 years. And this is what a processor looks like. It's on the right...

• 16:11Speaker 00

  Jensen, on the podium, explains what a GPU is. After that, he starts kissing the ring. Within a year, the two will be very chummy. Here, you're watching the beginning of something.

• 16:22Speaker 05

  Without the president's leadership, his policies, his support, and very importantly, his strong encouragement. And I mean his strong encouragement. Frankly, manufacturing in the United States wouldn't have accelerated to this pace. Manufacturing...

• 16:44Speaker 01

  It's important to remember that in his first term, Nvidia didn't really have a relationship with the Trump administration. Again, they didn't necessarily have a reason to have a relationship with the Trump administration. They didn't have much of a presence in DC. That obviously changed after the Biden administration. They realized that there could be a real threat with export controls. And the other important thing to remember is that at the beginning of the Trump administration, there wasn't necessarily a strong view on how export control policy should be shaped. Historically, China hawks have been a hallmark of the Republican Party. There's a lot of figures within the Trump administration who were China hawks. It came to be a dynamic that other officials in the Trump administration, like David Sacks,

• 17:27Speaker 01

  the venture capitalist who was the AI and crypto czar, would defend this more pro-innovation. We should be allowed to help American companies like Nvidia be able to export abroad. But in those early months, Jensen began to have more and more of a presence within the White House, at Mar-a-Lago, and pushing this idea that there shouldn't be strong export controls, especially around exporting chips to China, and that they wanted to have a hand in being able to shape what those policies would look like.

• 17:59Speaker 00

  And so then what? Like, how does life change for Nvidia in this world where now they have a friendly White House?

• 18:05Speaker 01

  Well, you really start to see, I would say, in the spring of 2025, Trump announces that they're going to rescind one of the flagship Biden administration policies on export controls. It was called the AI diffusion rule. The US has formally moved to rescind the AI diffusion rule and made it clear it would no longer be enforced while the bureaucratic process of revoking the rule unfolds. Trump announces they're not going to enforce that. There's a big trip to the Gulf, where they announce all sorts of new deals.

• 18:38Speaker 06

  What exactly do we need to know here? Is this giving Nvidia exactly what it wants?

• 18:42Speaker 01

  Well, this is giving Nvidia what it wants, but it's giving foreign governments like the United Arab Emirates and Saudi Arabia what they want to a number of countries. Again, another region that was likely going to be under export controls. And Jensen's relationship with Trump becomes more front and center. So at that point, you really see the influence where Nvidia's view on export controls, which essentially they should be able to sell externally to countries like China, begins to comport more one-to-one with what the Trump administration is doing on export controls.

• 19:16Speaker 00

  With a friendly White House, Nvidia started throwing its weight around in ways that I think a lot of people would have found, at minimum, off-putting had they registered it. Leo has one story about a writer at a conservative think tank who wrote a piece for City Journal. City Journal is a fairly niche conservative public policy website. I read it. I think I know one other person who does. But in this City Journal piece, the writer had pointed out that Nvidia chips were being smuggled to China, which we know they were. Nvidia's government affairs team demanded a meeting with the writer, in which they insisted he give them the specific serial number of the literal individual smuggled GPU, which obviously he did not have. I also do not have the serial numbers of any GPUs that are in China.

• 20:01Speaker 00

  It's a very aggressive, defensive reaction, particularly given Nvidia was actually in the wrong. The more concerning part, that we know less about, is the pressure Nvidia seems to have been exerting on other AI companies. According to the information, OpenAI has declined to take a position on export control with China because Sam Altman is scared of alienating Jensen Huang. Whatever you think of Altman, it does not seem great that one of the most powerful people in AI is afraid of his chip supplier because of Jensen's market power, because of Jensen's political power. Companies will pursue their own self-interest. But it's strange, in the past two years, how much public attention, from journalists like me, was on the behavior of the AI software companies, OpenAI, Anthropic,

• 20:46Speaker 00

  while Nvidia quietly stifled debate around a fairly important issue. I personally do not even know what I think America's policy towards China having American chips should be. I just know I'd like people to be able to talk about it in public without a five, well, now, $4 trillion company breathing down their necks. But in the world we've been living in, where Jensen and Trump are besties, where Nvidia has the chips everybody needs, the company has had a very free hand. What would have to happen for anyone to want to mess with the CEO of the most valuable company in America? The red balloon our brick of a stock market has been tied to. That was the status quo until just a few days ago. After the break, The Honey Pot shatters.

• 22:05Speaker 00

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• 24:13Speaker 00

  Welcome back to the show. The last time we talked about Jensen Huang on Search Engine, it was three and a half weeks ago, and I think three and a half realities ago. It was a long conversation with his biographer, and when I saw the headlines this weekend, he was the first person I wanted to talk to. Do you mind saying your name and what you do?

• 24:33Speaker 05

  Yeah, my name is Stephen Witt. I'm the author of The Thinking Machine, a book about Nvidia and Jensen Huang.

• 24:39Speaker 00

  I called Stephen because I thought he, more than most, could get to the heart of the real question I had. What was Jensen Huang thinking? What might have been on his mind when he began to possibly ruin his own life? Stephen had been thinking about this, too, and he said this story, it is about Jensen's relationship with this woman, Alice Huang, but it's also about the relationship Jensen led Nvidia into with her company, Megaspeed. Megaspeed. If you'd visited Megaspeed's website a couple of years ago, what you would have seen was the homepage of a very generic-looking cloud computing company, a data center company based in Singapore, whose website bragged about its close relationship to Nvidia.

• 25:17Speaker 05

  So it appears that this company, Megaspeed, was spun off from a Chinese company about 2023, and they bring in this woman, Alice Huang, and another guy as sort of the co-founders of this business.

• 25:29Speaker 00

  Alice Huang. We know she's a Chinese woman who began her career working for the Chinese state media outlet as a broadcaster, but transitioned eventually into the investment world. When Biden passed that export control ban, restricting some chips from going to China, Huang saw an opportunity for Megaspeed. The plan? Build data centers in countries outside of China, but then rent that capacity to Chinese AI labs. A workaround. And Megaspeed had this advantage that many American companies would have killed for.

• 25:59Speaker 05

  In late 2023, Nvidia announces that Megaspeed is one of its preferred NeoCloud partners in Asia, and they're going to build big AI data centers together.

• 26:11Speaker 00

  And what does it mean to be a preferred NeoCloud partner?

• 26:14Speaker 05

  It means that they're more likely to get Nvidia the latest Nvidia chips, that this is a preferred customer, when the latest drop comes out, like you have special access to it. Nvidia's business model can sometimes look like Supreme or Pokemon, where there's people lining up to buy the latest equipment, and getting an allocation is actually really hard.

• 26:33Speaker 00

  Got it.

• 26:34Speaker 05

  So Megaspeed is going to be a preferred partner. That's already a little sus, because there's a lot of US firms that would want access to this stuff, but with these NeoClouds in Asia, Jensen just sees an enormous market opportunity there, and he wants to help seed the market. Oh, and Megaspeed is one of like five or six of them. So it's not that shocking, at least at first. But they very rapidly grow to be one of his biggest customers in Asia. Out of nowhere, it's not clear who they're supplying, and it's not really clear who they are, right? Like, this is kind of a business that nobody knows anything about, that nobody's ever heard of.

• 27:11Speaker 00

  Because if, like, if XAI wants a bunch of Nvidia GPUs, we know what they're using them for. If OpenAI gets a bunch, we know what they're using for. Nobody knows what product Megaspeed and Alice Huang are actually making.

• 27:22Speaker 05

  Yeah, who are their customers, right? Like, who are they selling this to? Who, you know, presumably, you know, Malaysia does not have a very advanced AI development program. The only customer in Asia, realistically, is going to be China, right? And, and so Jensen's point of view, and I think this is something that is a little hard to understand, he's actually a little desperate.

• 27:47Speaker 00

  Why?

• 27:48Speaker 05

  He's terrified of China. He's terrified, and this is going back, because he's been in the hardware business for 40 years, or however long it is. What he has seen happen over and over is a US hardware firm develops some kind of hit product, innovative product, and then Chinese competitors knock it off, and the US firm goes bankrupt. That is the entire, like, problem that Nvidia has faced its entire existence, going back to the video game days. How to avoid being commoditized by Chinese hardware suppliers. And so Jensen's fear is that if he doesn't sell this equipment to China, that they will start to develop rivals to Nvidia on their own, and then he will be undercut. This is, in fact, exactly what happened more recently with the electric car.

• 28:31Speaker 05

  This happened to Elon and Tesla, and now BYD is selling, you know, electric cars for $10,000. It's very competitive. Jensen is worried that same thing is going to happen to him. And so what he has decided is the way to get around this is to, you know, essentially become the default supplier in Asia and not let some smaller, scrappier competitor form that will come and raid him from below. This has always been Jensen's biggest fear.

• 28:58Speaker 00

  It's the innovator's dilemma.

• 28:59Speaker 05

  It's the innovator's dilemma. And so he's trying to block that from happening. So what might look to some people on the outside like an attempt to capture market share, which it also is, but knowing Jensen, this is actually a defensive move for him. He's terrified of what will happen if he doesn't do this. And so, you know, he meets Megaspeed, he befriends Alice Huang, and then they start to appear together quite often at dinners and stuff, and there's always other people around. There's nothing especially, there's nothing that you would look at and immediately say they're having an affair, but their body language is a little weird, and people start whispering, both inside the company and around there. And The Times first picks this up in 2025 and report on Megaspeed, but, you know, they

• 29:43Speaker 05

  stop short of saying that Jensen has a romantic relationship or any kind of special relationship with this woman.

• 29:51Speaker 00

  Rereading that New York Times story from 2025 now, what's so striking is how the story just sat there on the internet for a year, like a piece of unexploded ordinance. The Times had a lot of this already. They reported that, quote, "Commerce Department officials have been investigating whether Megaspeed, which has close ties to Chinese tech firms, is helping companies in China sidestep American export restrictions." And the paper noted that Jensen Huang had been seen drinking with Megaspeed executive Alice Huang, that she'd bragged to some associates that she could summon him to a bar and then done it, and that it was unclear where her company had gotten the billions of dollars it needed to buy all these Nvidia chips.

• 30:33Speaker 00

  At the time, Nvidia's spokesperson, when asked about Jensen's relationship to this mysterious woman, said, quote, "Our field operations teams often host groups of customers and partners at conferences, and when Jensen is available, may ask him to visit to provide updates on the market." Updates on the market. We now know that around the same time Nvidia was publicly claiming all this, Jensen had already quietly hired a crisis PR firm, the type of company you call to navigate a scandal that may or may not come out. Stephen, when we spoke, was within just a short walk of Megaspeed. This mystery box that this month appears to be finally cracking open.

• 31:10Speaker 05

  I'm actually in Singapore right now. Megaspeed is right across the bridge. They're right across the bridge in Malaysia, in the state of Johor. And these data centers, it seems to me that they were like dummy data centers. So they would take Nvidia equipment in, they would kind of pretend to install it at the data center, and then they would put something else in there, in fact, and then take the Nvidia equipment, which was not supposed to be re-exported to China, and ship it on. And so that would have been, I think, hard to miss. I think it would have been hard for Jensen to miss that anyway, particularly if he's sleeping with the person in charge of the operation. So there is, in addition to, you know, kind of the classic fallout of infidelity, there's

• 31:54Speaker 05

  almost like a liability here for Jensen, a serious liability for Jensen and Nvidia for even doing business with this company in the first place. Like, the Commerce Department was already investigating this company. And, you know, typically, when something like this happens, there's a little bit of distance between the CEO and the actual kind of, like, misconduct, right? You know, you can always blame it on some underling or something. That can't happen, though, if you're sleeping with the customer.

• 32:20Speaker 00

  But so just so I understand, what seemed to have been happening, as far as you understand it, is that there was a, in some neighborhood in Malaysia, people thought there was a data center. They thought that the big, ugly building was humming with chips. And in fact, the building was like empty, and the actual physical chips were being sent to China?

• 32:40Speaker 05

  I think the building operates. I think there is a data center there. That seems pretty obvious, and you can see it on the map. They won't let you in, but it seems like it does draw a lot of power, and it's legitimately a data center facility.

• 32:50Speaker 00

  Did you try to go to the data center?

• 32:52Speaker 05

  I'm trying to, but they're not letting anyone in. It's like trying to break into a jail. Like, there's such... A high security, there's no way they're gonna let anyone in there. The thing is, this data center clearly had ties to Alibaba, which is a leading Chinese firm. And so the export restrictions really specified that certain Jensen's products were not to be shipped into China. And it seems like there's a strong evidence that they actually were shipped out of this place. The other thing that happened is even if they don't do that, then they can just set up the data center in Malaysia and Chinese developers can access it. It doesn't have to be in China. They can just access the same equipment from inside China. And that's obvious that that was happening. So my sense was at least initially that Jensen was either ignoring this or looking

• 33:36Speaker 05

  the other way, or being like, well, you know, my customers, I can't figure out who their customers are, right? Like, it's too far down the chain for me to pay attention. But that level of plausible deniability disappears if he's involved with the CEO of the company romantically, which he appears to have been. And the Commerce Department has actually been investigating this for a couple of years now, it looks like, going back to 24. I mean, the investigation into this started under Biden, and then appears to have been curtailed under Trump. So that's also pretty suspicious.

• 34:08Speaker 00

  Yeah.

• 34:08Speaker 05

  But then I think what happened is that Jensen was very friendly towards China. And I think some of the China hawks in the Trump administration started to grow worried. And I think they started to say, Jensen has too much influence over the president. And if you believe the Times reporting, it's actually Marco Rubio who prepared this intelligence report, or Marco Rubio's office. And they showed it to Trump. But it didn't seem to sway Trump's opinion of Jensen. So then I think they showed it to reporters. And I think that that's a power play. I think that that's the China hawks trying to reassert their supremacy in terms of giving

• 34:50Speaker 05

  advice to the president. I think there's some, you know, kind of like court intrigue going on here.

• 34:56Speaker 00

  One of the things I'm confused by, and I think it's like the kind of question that is just gonna take six, 12, or 18 months to answer, but like, when you hear that the CEO of one of the most valuable companies in human history that was subject to export controls, he didn't like the rule. He lobbied against the rule. He fought the rule. And like, things were being smuggled to China, and he happened to be having an affair with a Chinese intelligence asset who may have been a Chinese spy. And like, you can kind of imagine a continuum of explanations where on one side it is, he kind of just thinks China should have the chips, and so it was very easy for him to be in an extramarital affair with someone who also held those views. And maybe he never even noticed he was a spy. Like, he may have been leaking information, but it doesn't

• 35:39Speaker 00

  mean he was like, against the country. He was just very much for Nvidia. And you could also imagine from the same set of facts and interpretation that was like, very, very different. You know, like, that this person was intentionally helping another country in a sort of like treasonous way. And as someone who has actually spoken at length to Jensen, who has thought very hard about his psyche, like, we are in the unfortunate position of trying to like, interpret a lot from some strange facts which have not yet been filled in. But where does your intuition send you on this?

• 36:12Speaker 05

  It's a great question. My intuition tells me that Jensen genuinely believed that it was in everyone's best interest, including the United States, for him to have these export controls lifted. Now, obviously, it's very good for Nvidia's stock price to have these export controls lifted. So maybe he was just kind of talking his book, as they say. He was giving the argument that was maximally beneficial to his own shares. You know, there's an argument to be made that locking China out of this is not good over the long term. I could hear that side of the argument. But when the person making the argument has been compromised by a Chinese spy, I don't think I'm going to listen to it anymore.

• 36:54Speaker 05

  Jensen's credibility here is destroyed, regardless of what the facts are. The impression, the worst-case scenario you gave, I don't think that that is true, but it's a position someone could make. It's hard to kind of disprove it. You know, like, he is in real trouble here in terms of reputation. His credibility is absolutely destroyed. I don't think anyone will ever listen to anything he has to say about China again. Certainly, I wouldn't. And, you know, you could see this was just a very sensitive topic for him all along. You know, his point of view of why this was good never made a ton of sense. He never could really logically articulate why it was good for America to sell these chips to China.

• 37:37Speaker 00

  Yeah.

• 37:37Speaker 05

  You know, his attempts to articulate that looked a little flimsy. If you look at the Dwar Keshe Patel podcast where they get in an argument about this from a few months ago, he gets quite agitated. Why is it that your policy, your philosophy, leads to United States giving up a vast part of the world's market?

• 37:58Speaker 00

  I guess the claim here is, Dario had this quote where he said, "It's like Boeing bragging that we're selling North Korea nukes, but the missile casings are made by Boeing." And that's somehow enabling the US technology stack. Like fundamentally, you're giving them this capability.

• 38:12Speaker 05

  Comparing AI to anything that you just mentioned is lunacy. He gets quite agitated. That's normal for Jensen, but it's clear that he knew something sensitive was going on that he wasn't kind of revealing. The premise that even if we competed in China, that we're gonna lose that market anyways. I don't, you're not talking to somebody who woke up a loser. And that loser attitude, that loser premise, makes no sense to me. I think Jensen became aware that this was a liability for him sometime earlier this year. Because what I have heard is that Nvidia has gone back to mega speed and gone back to these other providers, and essentially told them, okay, like, no more funny business. Like, you have to actually keep the chips on site. We're gonna inspect it. And you

• 38:57Speaker 05

  have to demonstrate to us that more than 50% of your customers are not Chinese nationals. Even then, I'm sure China will find a way to access this equipment. But it's a somewhat higher bar. So I think, you know, Jensen is a guy going way back, who was always willing to skirt the rules a little bit. And I think this is an underappreciated aspect of him. I called him a back-of-the-class guy on our podcast, meaning, he knows how to cheat on a test. He knows how to rig a hardware benchmark in his favor. In the early days of Nvidia, they were constantly getting sued for appropriating other people's trade secrets. That happened four or five times to them. So, you know, they're willing to operate in these gray zones, and pretty aggressively sometimes, too.

• 39:39Speaker 00

  When Stephen and I spoke at the beginning of this week, Jensen's fate was very unclear. I mean, it still is. But Stephen gave me the lay of the land as far as he could see it.

• 39:48Speaker 05

  Nvidia's board is investigating Jensen. But realistically, those guys are not gonna get rid of him. I mean, it wouldn't, it probably wouldn't be in the Nvidia shareholders' best interest to get rid of Jensen. But where it could all come crashing down is in front of Congress. And particularly, you know, the Republicans are gonna make him testify, I think, in a week or two, but that's behind closed doors. When the Democrats come in, I think they're gonna haul him in front of everybody and be like, what on earth were you doing? I think that's gonna look really bad for him.

• 40:20Speaker 00

  So what do you think this all could mean? Like, what is the big version of this?

• 40:24Speaker 05

  The worst-case scenario is Jensen is forced out. And the true double worst-case scenario is Jensen is forced out, and then his wife divorces him. And then she independently becomes one of the largest shareholders in Nvidia, which could happen.

• 40:40Speaker 00

  When you say worst-case scenario, you mean worst-case scenario for him?

• 40:43Speaker 05

  For him. It would also be very bad for Nvidia shareholders, because Nvidia has a lot of what they call key man risk. Nvidia is Jensen. I mean, it's just him, right? It's just him. And then there's like 60 people below him. I don't, I can't think of a single firm with the exception of maybe like SpaceX, where the CEO is so vital to the existence of the firm. There's no plan to replace Jensen. There's no succession plan at all. I don't think it's going to happen. There's a chance it happens. But if I absolutely had to bet, I would bet that Jensen will still be the CEO of Nvidia in a year. I think he can survive this scandal. I don't know if his family can survive this

• 41:27Speaker 05

  scandal. His family may break up on this. I'm not sure.

• 41:30Speaker 00

  Do you feel like, you've been curious about this person longer than most people have. You've spent more time trying to understand this person than most people have. Like, how much do you feel like this upsets your idea of him? And how much of it feels like, oh, knowing what you know about him, you can fit this into your understanding of the person?

• 41:48Speaker 05

  You know, I am not shocked that he had an affair. In Asia in particular, Jensen is like Taylor Swift. He's so famous, and people are constantly following around. And women are like throwing themselves at him. And the temptations there must be extreme. It's not an easy position to be in, in some ways. I'm not excusing what he did, but I'm not that surprised. In our conversations, Jensen would go to such extreme lengths to present himself as a normal guy. In fact, he screamed this at me once. I'm just super normal. I'm a totally normal guy.

• 42:32Speaker 00

  That's what normal guys are always screaming at people.

• 42:35Speaker 05

  It's just not true. It's just not true at all in any way. And, but that was his identity. And for whatever reason, that presentation of normalcy was something that he really, really wanted to display to the public and through his actions.

• 42:53Speaker 05

  But I never bought it. And so I always felt there was something a little performative about all of it. And I think that makes me less surprised that he had an affair. You know, Jensen met his wife when he was 17 years old. They got married when he was 23. It was his only girlfriend he'd ever had. Now he's in his 60s. They've been married 40 years and he's rich and famous. I'm almost more shocked that his relationship lasted as long as it did. Um, now, having said that, I am so shocked that this was the woman. Like, I cannot believe Jensen fell for this. He got played.

• 43:36Speaker 05

  Like, he got played, okay? This was not subtle. That's the thing. This was not like some kind of subtle influence operation. Anyone looking at these people, at this person at Megaspeed would have instantly concluded in two seconds that they were a Chinese front.

• 43:52Speaker 00

  But you think he really didn't know? Like, you don't think he chose not to?

• 43:56Speaker 05

  That's the thing. How could he not know? How could he not know that? I don't believe it's possible that he could not know that. And that's why I find it shocking. I don't understand how he could ignore the red flags here. I mean, I, I guess I do understand because people can behave in self-destructive ways and I've seen that happen. But I, I just don't understand how someone at his company didn't just grab him and be like, Jensen, no. Like, like, don't know. You know what I mean? But he doesn't listen to anyone, so it's pure hubris, perhaps.

• 44:30Speaker 00

  Yeah, I mean, it's also funny. I mean, you said, you said that at one point he was like screaming, like, I'm a normal person. And you were like, obviously, he's not a normal person. He's like, for, for better and for worse, he's not a normal person. But doing something really stupid that everyone else can tell is really stupid. That's very normal.

• 44:50Speaker 05

  The most relatable thing I've ever...

• 44:53Speaker 00

  I know.

• 44:57Speaker 05

  Look, everybody plays the fool sometimes. And I guess, I guess it's Jensen's turn.

• 45:05Speaker 00

  As of the morning I'm writing this, Wednesday, November 11th, the story continues to metastasize. There will be an internal investigation at Nvidia. Trump is claiming that the FBI will conduct its own investigation. There will also almost certainly be congressional hearings. We will ultimately learn much more about Jensen's private communications around all this, as well as much more about the government's side of things. Why, given that Trump officials were warned about this relationship much earlier, didn't they do anything about it? Thanks this week to the very busy, very exhausted reporters we spoke to on mic, Stephen Witt and Leo Schwartz. We will have links to their work in our show notes. We will also have a link to our earlier episode about Jensen Huang, if you just want to hear the rest of his story.

• 45:50Speaker 00

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• 49:28Speaker 00

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