Hour 3 - Why the Affairs Matter

Buck Sexton (0:00)

All right, third hour, Clay and Buck. Last one before the weekend, which everybody's working for. That's what I'm told. Thanks for being here with us, guys. We are going to dive in a bit more here, but I also want to take your calls, your talk back. You know, the talk back is on the iHeart app, a great app you should all have downloaded. And Clay, I wanted to do a little bit on this, on this aftermath. Well, it's kind of still going, but the so far of the Jensen Huang situation here, and try to explain to everybody why this is a good word, broad word.

Well, what was that?

Clay Travis (0:38)

I said situation is a good word here. Yeah, it's a clean word.

Buck Sexton (0:44)

So there are three ladies now. And as I said on Twitter, three Huangs do not make a right.

Clay Travis (0:50)

What was the response? You tested that one with me before. Was it mostly dad jokes, groans?

Buck Sexton (0:55)

Yeah, most people.

It was mostly a whomp whomp. But I thought it was pretty decent.

Sometimes you got to take your shots, everybody. You got to take your shots. It's part of the game. Sometimes you hit the rim. Maybe that was an air ball. Maybe that was an air ball. I will say that was, why is it air ball? I didn't play much basketball. I really just played up to high school. But an air ball is just such a point of humiliation. You could throw up a brick that just hits the backboard.

Clay Travis (1:21)

Air ball can get stuck against the rim and the backboard.

Buck Sexton (1:26)

But there's something about the air ball that was like, you should just go home and cry in the corner for a few hours. Anyway, back to Nvidia and why this matters. Okay, so let's just take a step into the whole picture here. Nvidia makes specialized computer chips powering a lot of the AI boom. Jensen Huang has been its co-founder and sole CEO for 33 years.

So why is it a big deal for ordinary people? Well, first of all, it has already hit stock portfolios, really any broad exposure portfolio, which means your 401k. It's, oh, I don't invest, Buck. I just, you know, my company has a thing and I put some money in and it's a 30 year retirement date. If you have one of those, you got hit with this this week because it affects the whole market.

This affects the pace of the AI tools that everyone's going to be using and how quickly they come out. But also, perhaps most importantly, the US technological competition that we are in right now with China, which is also why we'll get into the spy thing here in a second. And I want to spend a little more time on Clay's theory about this, because I do think it's interesting. You know, Nvidia started out making graphic cards for video games. There you go. I was in... I still like video games, not going to lie. I like plants, video games, and guns. I'm a weird guy.

Clay Travis (2:50)

Are you going to buy Grand Theft Auto next week when it comes out?

Buck Sexton (2:55)

I've never been at Grand Theft Auto.

SPEAKER_3 (2:57)

Set in Miami.

Clay Travis (2:58)

I saw rewards all over, like, I mean, a fictionalized version of Miami.

Buck Sexton (3:02)

Yeah, my hometown community here of Miami Beach has some special program, but some people were actually against it. But anyway, so yeah, I'm not a Grand Theft Auto guy particularly, but a lot of people are. I think it's the best-selling game franchise, maybe of all time, when you add in all the dollars in, it's something incredible like that. So those chips turned out to be perfect for the massive parallel calculations needed to train and run modern AI, like ChatGPT, the image generators, self-driving systems, all that stuff that we talk about. So Huang, Huang is how you say it, even looks like Huang to me, resigned effective immediately on November 12th, extramarital relationships, the board opened an investigation, we know how that's gone, stocks taking a heavy hit, reports put the market value in the loss of hundreds of billions of dollars since the story broke, and Nvidia's large enough weight in the S&P 500 that many tech and index funds have already been hit because of this. Why does this matter, Clay? The AI tools, the services you already use, they need Nvidia. Your retirement investment accounts, they need Nvidia. Let's talk China and national security.

Huang had been a prominent voice arguing for continued sales of advanced chips to China. The alleged relationship with someone, intelligence officials think, Clay, maybe was a spy working for Beijing, raises some very real questions here about even was it just a particular fondness being whispered in his ear for selling these very advanced chips to China and about export controls and US policy and all the rest of this.