Nvidia: Investigation into Huang and Pressure on Exports

A relationship admitted by Jensen Huang with a former executive of Megaspeed, suspected by U.S. agencies of being linked to Chinese intelligence, has triggered an internal investigation at Nvidia. This episode undermines lobbying efforts in favor of AI chip sales to China, as Washington deems the company's safeguards insufficient and the succession question remains open.

Governance: A Central CEO, Without a Succession Plan

Nvidia boasts a market capitalization of approximately $4.5 trillion and ranks as the second most valuable company in the world. Jensen Huang has structured the company outside of conventional norms, with around 60 employees reporting directly to him. There is no public succession plan. Analyst Stacy Rasgon (Bernstein) believes that Huang "is Nvidia" and personally oversees most operations. Unlike Mark Zuckerberg at Meta, he does not have dual-class shares. His stake, just below 4%, does not protect him from being ousted by the board or shareholders.

Internal Investigation and Chinese Denial Following Huang's Admission

Jensen Huang has acknowledged an extramarital relationship with Alice Huang, a former executive at Megaspeed International, information disclosed in an internal memo. U.S. agencies classify her as a presumed informant for a Chinese intelligence service. Marco Rubio reportedly alerted government officials via memo about the closeness between the two. In October, Huang described this relationship as normal. The board of directors has initiated an independent investigation entrusted to a committee of independent directors. The Chinese embassy, for its part, rejects the allegations of espionage.

Compliance Measures: Tracking Chips and Trade Restrictions

Nvidia has enhanced the tracking of its accelerators through Fleet Intelligence, a system that records their location. In Southeast Asia, this component has become a prerequisite for obtaining Nvidia Cloud Partner status. However, sharing location data with the company or U.S. authorities remains voluntary. At the same time, Nvidia has halved its pre-approved Asian buyers and caps the resale of computing capacity to Chinese companies at 50%. Washington and Capitol Hill consider these safeguards insufficient, according to a source. Nvidia claims to comply with the law and refers the identification of illegal actors to the government.

Megaspeed at the Center of Evasion Suspicions

Megaspeed operates data centers in Southeast Asia and provides computing capacity to clients including Alibaba. U.S. authorities suspect that the company serves as a gateway for Nvidia chips under control to reach China. A Malaysian sister company reportedly acquired at least $4.8 billion worth of AI hardware incorporating Nvidia chips between June 2024 and February 2026. More broadly, despite U.S. export bans, volumes estimated in the billions of dollars are believed to reach China through smuggling routes in the region.

Huang's Pro-China Advocacy Loses Strength in Washington

For years, Jensen Huang has advocated for the continuation of AI processor sales to China, arguing that depriving the world's second-largest market would push Beijing to build a potentially superior supply chain. He conveyed this message to the Trump administration and accompanied the president to Beijing in May. The current situation jeopardizes this effort, with Republican lawmakers even requesting a meeting before the public admission. After the midterm elections, stricter controls appear more likely. Nvidia's negotiating position could be weakened as a Democratic Congress is set to take control of committees in January with the intention of scrutinizing AI exports to China more closely, according to some estimates. This situation weighs on the company's strategy, already criticized for the lack of a succession plan and its dependence on its leader.