Nvidia’s moment of reckoning, Inside Dem's 2028 AI safety brainstorm

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Calder McHugh (0:35)

Hello and welcome to Decoded by POLITICO. I'm Calder McHugh.

Brendan Bordelon (0:39)

I'm Brendan Bordelon. Nvidia has opened an investigation into CEO Jensen Huang after discovering he was having an affair with an alleged Chinese spy. Nvidia's board has said there's no reason to believe that national security or the company secrets have been compromised. But what comes next for the investigation and for Huang himself?

Plus, we'll chat about a meeting in San Francisco. It brought together some 2028 presidential hopefuls to talk about tech and AI.

Calder, I had a different story planned for today's pod, but as often happens in the world of tech, a story broke out, it changed all of our plans. Yeah.

Calder McHugh (1:15)

Of course, you're talking about the news that Nvidia, a computer chip company based in the US, is investigating its CEO Jensen Huang. I also have been working on a different story today that we'll talk about later in the podcast, but I would love to hear what you've learned so far about Nvidia and Huang.

Brendan Bordelon (1:31)

Yeah. Some of it we are learning from other sources because this is still a breaking story.

Late on Sunday, Nvidia disclosed that Jensen Huang had an affair. The New York Times is reporting that the US government believes that this woman is a Chinese spy. We have not been able to independently confirm that, that has not been denied by either the US government or Nvidia at this point. In a message to the company, Mr. Huang apologized for the affair. I was unfaithful to my wife, he said. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry. Nvidia's board has said that it has no reason to believe that either national security or Nvidia secrets were compromised. I'd also said that the board's inquiry will examine all available information. It said Mr. Huang fully supports the review and is committed to cooperating with it. Jensen Huang will continue to lead the company during the investigation, according to Nvidia's board. The New York Times reported last month that American intelligence agencies had discovered that Jensen Huang had developed a close relationship with a Chinese citizen and buyer of advanced AI chips, who US officials concluded was gathering intelligence for the Chinese government.

On Sunday, the New York Times reported that Secretary of State Marco Rubio had warned officials in the US government of Huang's relationship with this Chinese executive.

Calder McHugh (2:49)

Yeah, so this kind of story, of course, is unusual for many reasons. It's quite shocking. I think everybody in the tech world, their phones have been blowing up today and that includes us. Brendan, what was your reaction to the news?

Brendan Bordelon (3:02)

I was a little bit surprised, frankly, just given Nvidia's exposure to this kind of allegation. Nvidia has for the last 18 months or so been crisscrossing Washington, going to the White House, going to the Hill, pushing for a relaxation of US government's restrictions on the sale of its advanced AI chips to Chinese companies. For Jensen to have some extramarital affair with a Chinese citizen that obviously is at the nexus of these issues, and Megaspeed, a Singapore-based company, been reported that was already under investigation. Obviously, Jensen's behavior here has the potential to cause significant blowback for Nvidia, I think particularly given all the scrutiny that is already on the company, given its push for the relaxation of chip controls, and the concerns that that might re-down to the benefit of Chinese AI companies and potentially hurt national security.

Yeah.

Calder McHugh (3:59)

Obviously, as well, Huang is so closely tied with Nvidia. He's thought of as this singular leader, both inside and outside of the company, and he also has this incredibly close relationship with the Trump administration. I am curious, Brendan, how do you think that administration is going to react to this news, again, given their very close relationship with him in the past?

Brendan Bordelon (4:22)

That's the huge question everyone is looking to see answered right now. From what we can tell with the New York Times reporting, the White House was aware of these connections for and has been aware for some time. Presumably, that's true of agencies like the Commerce Department, which is tasked with both imposing and enforcing these kinds of AI export controls on advanced ships. Yet we have not seen any action taken against Nvidia by this White House or the Commerce Department. We have not seen any action taken against Megaspeed, the Singapore-based company at the center of these concerns.