New York, Nov 12 (IANS) Jensen Huang, the embattled CEO of AI hardware powerhouse Nvidia, resigned Thursday amid allegations that the woman he had an affair was a Chinese intelligence asset. The announcement of his resignation came after Nvidia’s board met for hours on Wednesday and appointed Chief Financial Officer Colette Kress as the acting head of the technology behemoth that powers most of AI majors in the US.
Huang, who has admitted to an affair with a woman who is suspected of being a spy for China, was reported to be involved with another woman working for him, according to several independent news reports.
In what could be a classic honeypot spy trap involving Alice Le Huang (not related to him despite the shared surname), the scandal reaches into the highest levels of technology, business and government.
The upheaval in the company stretches across a vast swathe of the US, from politics and international relations to technology and the stock markets.
The scandal broke as President Donald Trump prepares to go to China for the Asia Pacific Economic Cooperation (APEC) summit next week, where he will meet with President Xi Jinping.
China has denied any intelligence links to Alice Huang.
Huang was closely identified with Trump, who loosened the ban on selling high-end chips to China by allowing him to sell a second-level chip to Beijing with a cut for the government.
Huang had lobbied for selling advanced chips to China opposing the US ban to keep China from catching up with it in the AI race.
The scandal exposed a split in Trump’s administration with Secretary of State Marco Rubio, who tipped off Trump to the spying allegations, and others like Commerce Secretary Howard Lutnick, who wanted to monetise Nvidia’s chip supremacy with sales to China.
Trump gave Huang a clean chit on Monday, telling reporters, “I just know Jensen very well. I just think he’s a very honourable man”.
Huang reportedly told Trump that he was unaware of any possible link between Alice Huang and China’s spying machinery.
The scandal follows the Republican Party rout in the midterm elections and the party itself has called him for a closed-door briefing with the House of Representative Foreign Affairs Committee and threatened him with a subpoena if he does not come.
When the Democrats take over Congress next year, he and his links in the US and abroad will come in for greater scrutiny.
Huang built Nvidia from a chipmaker for gaming computers to the lynchpin of the AI revolution, powering virtually all major western AI companies helping them keep the US lead in the domain.
Kress has a formidable job ahead of her as Huang had kept an iron-fisted control on the company without a hiearchy or a line of succession.
About 60 department heads reported directly to him, and she — or an eventual permanent CEO — would have to not only wield the same level of control but also be knowledgeable enough and capable of keep the company’s pioneering work.
As CFO, she most likely had a broad view of the company’s workings and was involved with all departments.
The company stock fell from its peak of $243.37 on October 6 to $160.98 on Thursday as the news of the resignation sank in, a slight rebound since after-hours trading numbers.
But it is decline of nearly 35 per cent from the record high, acting as a drag on many indexes.
Nvidia was the richest US company by value but as the scandal unraveled it conceded that position to Apple, while Huang slipped from the sixth position on the Forbes billionaire ranking to 12th position with a net worth of about $148 billion on Wednesday.
The crisis would have an economic impact across the AI sector because of the reliance on Nvidia chips.
The AI sector has been an important driver of the stock market boom.
Anthropic, one of giants of AI that rides on Nvidia chips and is preparing to go public, has valued itself by as much as $1.46 trillion.
Any disrupton could have wider repercussions that reach into the retirement funds of millions in the US.
Even if China had not received any trade secrets through Alice Huang, it would still benefit frorm any upheaval in the US AI sector due the fallout of the scandal.
The New York Times reported Huang’s alleged affair with a company executive, Kimberly Powell who is the vice president of health care, in violation of the company code of conduct, adding to his travails.
Huang is married for about 40 years to Lori Huang, whom he met while they were engineering students, and made a public apology to her for the affair with the Chinese woman.
Besides the possibility of company secrets, that affair drew scrutiny because Alice Huang was an executive with a Singapore-bases company, Megaspeed, that the Times reported was a shell company, to buy the advanced chips, bypassing the China ban.
She had worked as a TV reporter before getting into banking on her way to entrepreneurship.
Media reports said that several months ago US intelligence agencies had raised suspicions about her links to China’s Ministry of State Security, and Rubio had warned Trump about it.
Trump has asserted that he had not received it.
Huang was not on the list of US business leaders to accompany Trump to China in his May visit, perhaps because of the doubts about him,
But Trump, who learned about it after the trip had started, arranged for Huang to meet Air Force One during a refueling stop in Alaska and join him on board.
–IANS
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