Big Technology Podcast
00:00:00 · Alex Kantrowitz
[00:00:00] S0: This episode is brought to you by Cribl. Quick question. Is your IT budget growing 30% a year? Because your data is. And now AI agents are piling on, running investigations around the clock, and running up three meters at once, storage, queries, and tokens. Cribl, the AI platform for telemetry, was built for exactly this. Own all your data, query it wherever it lives, and let Cribl route every AI request to the right model at the right price. The best part, AI inference for workloads on Cribl is included. Models will change. Agents will change. Your data is the asset that lasts. Own it with Cribl. Visit cribl.io. How do you price intelligence as a service? How do you charge for delivering end to end work, not just access? Those questions remain front and center for AI founders and operators. And getting to the right fit business model, whether that's selling usage credits, outcomes, seats, or a hybrid combination, requires constant iteration. Chargebee is the billing and monetization infrastructure that powers just that for ambitious, fast scaling AI businesses. Visit chargebee.com/alex to learn more. That's chargebee.com/alex. Holy smokes. Well, in a year of countless wild headlines about the AI industry, boy, is this one for the ages. Yes. We've been doing a lot of emergency podcasts on the show, but the news cycle just requires that we weigh in on these events, and we have one for you today. Jensen Huang, the CEO of NVIDIA, has admitted to an affair, cheating on his wife with somebody that the US government believes was working with the Chinese government to pass information along to them in her role as a spy. Today, we're gonna do a quick emergency episode. I'm here solo. It's Alex Kantrowitz. We will obviously be covering this later in the week, but I'm I'm here to do a short episode to talk about what happened and what the implications are as we get the week started. Obviously, this week, this news is too big to let it go until Wednesday or Friday. So we're here talking about it right now. Alright. Let's go to the Wall Street Journal.
00:02:12 · Alex Kantrowitz, Jensen Huang
NVIDIA's board investigates report that CEO was spying Target after a fair NVIDIA's board said it's launching an investigation Inter reports that Jensen Huang has been the target of a foreign espionage effort after the CEO had a romantic relationship with an executive suspected of working for Chinese intelligence. US officials last year concluded that Chinese citizen Alice Huang, no information, no no relation, then a top executive at Megaspeed International was sharing information with the Chinese government while working with NVIDIA to build data centers in Asia. Huang apologized. Missus Jensen, I'll call him Jensen in the rest of this episode, and her Alice. So Jensen apologized to his staff Sunday for being unfaithful to his wife. [00:02:59] S4: I owe my family and all of you an apology. There is no excuse for what I did.
00:03:04 · Alex Kantrowitz
[00:03:04] S0: The CEO and his wife, Lori Huang, have been married for about forty years and have two adult children who work for NVIDIA. We'll get to this in a bit, but, of course, it's not just a... Just an affair or a regular affair. Obviously, if the US government suspects, suspects that Alice is working as a a spy for Chinese intelligence, then it's much more about what was shared and what's passed along than the infidelity itself. Of course, the infidelity is not great, but if it was just infidelity, it would be a much more minor story. A little bit about Alice Huang and MegaSpeed. This is from CNBC. What is MegaSpeed? MegaSpeed sells services to the Asia Pacific based companies that need large amounts of computing capacity usually for AI projects by selling access to computing resources hosted in data centers in Southeast Asia. It advertises itself as a core business partner of NVIDIA's computing power cloud, a business in the region allowing customers to rent computer computing power from NVIDIA GPUs, which are specialized chips designed to do many calculations at the same time, of course, have become central to the AI build out. This was what Alice Alice Huang was pitching. This is from the Financial Times alleged Chinese spy link to NVIDIA chief pitched AI chip deals to investors. The woman at the center of the NVIDIA spying scandal pitched an AI chips deal to China based investors touting her ability to secure The US company's coveted GPUs and her commercial relationship with the... With Chinese tech giant Alibaba. In early twenty twenty five, Alice Huang and her business partner, Kantrowitz, saw investment for a Southeast Asia data center project worth several $100,000,000. The pair said they had no problem securing GPUs as a key pillar of the deal and cited Alibaba as a client of the project according to one investor present. Okay. So a couple of things here. Obviously, Jensen met Alice, in their dealings in terms of, him trying to bring, GPUs, into China. This is not a surprise. None of this is surprising. Right? Jensen has always been in favor of sending GPUs to China. He's always believed it's important for China to be on The US system of AI infrastructure. It's been explained to me like this. Basically, if China's using AI... USA infrastructure and advances are made on USA infrastructure, US will always have...
00:05:33 · Alex Kantrowitz
US companies will always have access to that that infrastructure. If they move to different infrastructure and make advances on, let's say, Chinese chips from Huawei, and China restricts those chips to The United States, then The United States will not have access to, to that infrastructure potentially. So that's why Jensen has always said, it's important for everybody to be on The US system or GPUs. Of course, that means Jensen sells more GPUs because he's the one who's building them. But that's sort of beside the point. So obviously, he made contact with this woman, Alice Huang, you know, seemingly in the normal course of events, nothing really suspicious about how they met or the work they were doing. The only thing in this story that really goes wrong is, is they become close. They have an affair, and it doesn't stop there. The fact that Xi has, according to US government sources, had a connection with Chinese intelligence and was passing information along to them makes this a very big deal because, of course, Jensen Huang is not only the CEO of the most important AI company in The United States and the world for that matter. He's also a top confidant and ally of president Trump, a top friend of president Trump. Remember, president Trump called him in the middle of a panel at the All In Podcast. And so having a... Having somebody from your intelligence services or working for your intelligence services very close to him opens up all routes to understand not only the plans to build your your chips, the policy discussions happening in The United States, but it's also just a good asset to have just in case, you know, you wanna take that company down a peg. Okay. So this is this is the setup. It's a classic honeypot setup. I think we've been good on the show about talking about honeypots. It's one of the things we've covered, you know, both seriously, and, we've kind of enjoyed the concept a little bit over the past couple weeks. But but the bottom line is if the reports are all true, it looks like Jensen fell right into a honeypot. So now that he has, the question is, what does it mean?
00:07:48 · Alex Kantrowitz
There's a tremendous amount of uncertainty around Jensen's future and NVIDIA's future and the AI build out's future because we don't really have situations like this where the leading executives in the most important companies end up in bed with adversarial nation spies or at least we don't hear about it so often. So if that's what happened, there are going to be some issues. So a couple of things I wanna share. First of all, about Jensen. I don't think there's any executive, as much of a single point of failure within an important company as Jensen Huang. Remember, he co founded NVIDIA in 1993. He has about 60 direct reports, he said, and he has managed these relationships both with partners and competitors, buyers, and governments for a long time. He's been central to the NVIDIA story. He believed that GPUs were going be very important technology when a lot of people wouldn't give NVIDIA the time of day, and he is the center of that company. It is a Jensen company. And so any any problem with Jensen is really a problem for NVIDIA, a big problem. And especially, you know, if he ends up being removed or he steps down as the leader of this company, some people have suggested they don't really understand how NVIDIA would continue. Now his children are working there, but I don't know if they're ready to take on his role. Now I do have a take about whether Huang will step down or be pushed out, but that will wait, I think until the very end here. That'll be my punchline. So so stick with me a little bit as I try to point out the most important issues here, and what might happen. So just to set the table here, I think it's important for anyone who says Jensen Huang's affair with Alice Huang is just a simple affair or they're hoping for a simple affair the way that Bill Ackman suggested. I think they need to get their head checked. This is not just a simple affair. This is an affair with someone that the US government believes was associated with Chinese intelligence services. Right? They she... They believe she was a spy, whether that's somebody who was, like, hired directly by them or passing information along. It doesn't matter. Is this someone who was compromised? And and so was Jensen. Now Jensen was as compromised as can be because when you have a secretive affair with somebody, they can hold it over your head.
00:10:18 · Alex Kantrowitz
You put yourself in a position where they've got something on you, and then you're sort of... You're you're beholden in a way to their wants and interests. So I I think those who believe that this was a simple affair, they simply aren't seeing the full picture. This is not a marriage issue. This is not a family issue though. It certainly is that it's not that alone. It is a corporate security issue. It's a national security issue. Now, you know, many people have said that this is not as big of a deal as people are making it out to be because Jensen by definition was going to be anti export controls. He had been advocating to sell more to China as a matter of it was a course of business. And so of course, like it's not like the government of China was going to cajole him into doing this with, you know, by by setting him up with some... With a member of intelligence. The writer, Bill Bishop, of cynicism disputes this, and and I think he's totally right. Now remember, Jensen is a text buddy of president Trump. Jensen is the keeper of a lot of super confidential design and information, you know, within NVIDIA. Here's what Bill writes. He he says, and I think this is fair, was she ever alone with his phone or computer? Say when he got up to go to the... To use the bathroom. Right? You have a guy who president Trump is calling mid panel, probably texting him as well. In the bedroom, yeah, you get up, you go you go use the bathroom, you go take a walk, you go, I don't know, get something to eat from the fridge. There's all possibilities to compromise the security of the phone or the computer you leave behind. I'm not saying this happens, but the point is it didn't need to be Jensen's intent. It didn't need to be his, you know, express interest, to to share information he didn't wanna share. When you're in a position like that, it can happen and you can't rule it out. And I think that's why when the board the board had a very interesting quote about this. They said, effectively, we have no reason to believe that there's anything, you know, effectively that has been shared about NVIDIA or US security interests, solicitly. Yet you can have no interest, no reason to believe that that stuff happened, but it could still have happened. And if it happened, it's a problem. So the corp...