Opinions and Editorials Section
By Audrey Elwood, Chief Columnist
Nvidia’s stock has plummeted by around 18% in the last week, due to the midterm elections, and a little more controversial reason. The face of the company, Jensen Huang, has been caught having an illicit affair with a Chinese spy.
No, this is not a salacious rumor by a competitor. The United States government has gotten involved and confirmed the allegation. Huang has been married to his wife for 41 years, and is generally seen as a dedicated tech visionary. Obviously this looks very, very bad. Now, he is risking his company, reputation and with it the U.S. economy.
Nvidia’s stock all together is worth $4.2 trillion which is roughly 7% of the S&P 500 and the largest company behind Apple. This is fueled by AI, as they make the industry standard chip for AI data centers and processors.
It is almost impossible to explain how vital Nvidia is to the industry right now. It is the bellwether stock, if Nvidia goes down, so does everyone else.
When you build up a company like Nvidia, the founder becomes a cult of personality. Think of Tesla with Elon Musk, Microsoft with Bill Gates and Apple with Steve Jobs, their CEO’s help build up the hype. Unfortunately for the stock market, tech founders tend to be poor at interpersonal skills and staying out of trouble.
This is compounded by the midterm elections. The results were horrific for the AI companies. A massive “blue wave” swept the country, and when data centers were on the ballot, communities overwhelmingly rejected them.
Democrats ran on a largely anti-AI platform, in contrast to President Donald Trump’s pro-AI stance.
Huang is known to be an informal advisor to the administration on AI policy, and generally cozy with the administration.
Chief Columnist Audrey Elwood argues that the Jensen Huang scandal represents another big shock for the tech industry to endure
“I think he probably has an excuse for it. He’s done an amazing job for our country.” Trump said about the affair situation.
Nvidia chips have a lead over Chinese manufactured chips, but only by a small margin. They are two or three years ahead of China, and the secrets are protected.
The U.S. regulates who can purchase the chips in the first place, and it is a huge detriment to the company when its own founder is found leaking these secrets to an affair partner.
Huang’s mythos is gone, and with that his board is now deciding if he should be ousted as CEO. Ultimately, Nvidia’s best interest is to keep Huang in some regard. While he is a liability right now, a shakeup of the board is a detriment to the whole industry. There is simply no one who can fill his shoes.
When evaluating who is put on a pedestal, and who is leading one of the most innovative and large-scale companies in the world, interpersonal skills should be recognized. Cheating with a much more attractive foreign businesswoman who is in your internationally competitive industry indicates an unprecedented level of stupidity or ego.
The country is still evaluating the wreckage of the scandal, however it is not going to be the end of Nvidia. While there is short-term distress, Nvidia is a consistently good stock. However, their earnings call on Nov. 17 will likely be the roughest for them of recent memory. The fundamentals are still there, but fundamentals do not matter in the court of public opinion, where Huang is ruled: Guilty!
