Secrets, Chips and Spycraft: The Nvidia C.E.O. Scandal

[music]. >> From the New York Times, I'm Natalie. Kitroeff. >> A real life spy thriller? >> This is the Daily. >> Sounds like a honey trap and a really. good movie. >> Sex and spy scandal engulfing one of a. US technology giant. >> We need to talk about Nvidia. This story. is incredible. [music]. >> Today, the extraordinary story of how. the head of Nvidia. >> That's right. The biggest name in. semiconductors, the man driving the AI.

boom was possibly. >> at the center of the AI revolution. >> To put it crudely, Jensen Huang was. apparently honey trapped by China. >> came to admit that he'd had [music] an. affair with a woman that US officials. say is a Chinese [music] spy. >> Sounds like Mr. Huang has explaining to. do to his wife, his company, and the. government. >> I speak with my colleague, Tripp Mickle, about what the growing scandal means for. the CEO, Jensen [music] Huang, for his. $4 trillion company, and for the global.

battle for supremacy in artificial. intelligence. >> [music]. >> What a mess. What a mess. >> It's Tuesday, November 10th. [music]. Tripp, welcome back to the Daily. >> Thanks so much for having me. >> Okay, so I and I think everyone else. have been completely glued to this. story, which is honestly something out. of a movie, it feels like. This spy.

working on behalf of the Chinese. government infiltrates one of the most. valuable companies in the world by. having an affair with its founder. You and many of our colleagues here at. the Times have been leading on this. reporting, and I want to know absolutely. everything, starting with. why this matters at the highest level. >> Well, this story has a little bit of. everything, right? It's got sex and. spies and semiconductors. Like what what. can be more engrossing than that. combination? But when you think about.

why this story matters, you have to look. at what has changed in the world at. large over the past three years. And the. biggest fundamental change is artificial. intelligence and the increasing belief. that. artificial intelligence is going to be. an industrial revolution. And the. company behind that industrial. revolution, the the company that's. enabling it is NVIDIA. >> Mhm. >> NVIDIA has a 90% market share in the. artificial intelligence chips that are.

used to build and run AI systems. So. every time you go to ChatGPT or Claude. or Grok or anything Gemini, anything. else and you put in a query, odds are. some portion of that response that you. get is powered by NVIDIA's technology. And so. this has ramifications for everybody. It. has ramifications for policymakers in. Washington. It has, you know, geopolitical ramifications for the. US-China relationship. And it has.

ramifications for you, me, and everybody. else who has a 401k because NVIDIA is. such a big company in terms of its value. and in terms of its prominence in the. S&P 500 and in terms of what it means to. where artificial intelligence is going. that the stock market literally it moves. up and down based on how NVIDIA is. trading. >> Okay, so this story matters a lot and. not just because it is filled with.

incredibly tantalizing details, twists. and turns, but because a lot of our. economic health is riding on this. industry and on this company. >> And on this one man, Jensen Huang. And. so. it's hard to begin to wrap your head. around how important Jensen Huang is to. artificial intelligence and this company. itself. He has a flat structure with 60. direct reports. There's no clear.

indication of who his successor might be. if he were to get hit by a bus tomorrow. And now he's become enmeshed in arguably. the most. explosive geopolitical controversy. in corporate history. >> Okay. At this point, we should note that. yesterday a Chinese government spokesman. rejected the claim that the woman at the. center of all of this was a Chinese spy. and dismissed the reporting as nothing. but a smear against China.

But let's talk about how we got to this. place where one of the most powerful. CEOs in the world. gets tangled up in such an explosive. high stakes mess. Like where does this story begin? >> You have to back up to last August when. Anna Swanson and I got a message from a. tech industry contact of ours who said, hey, you really got need to drop. everything and look at this company.

called Megvii. It's a Singaporean. data center firm. I mean, it's literally. a company that buys chips from Nvidia. and builds data centers. And there's. nothing about that on the surface that. says this is something we should drop. what we're doing and devote time and. resources to figuring out what this. company is and why it matters. But. Nvidia was selling chips to this company. at a time of increasing controversy over.

where AI chips go. The US government has been concerned for. years about the arms race, so to speak, between the US and China over who's. going to achieve supremacy in artificial. intelligence. And when the AI revolution. started in late 2022, the US had restricted China from buying. Nvidia's best chips and best technology. because it wanted to stop China from. being able to build [music].

technology that was as sophisticated and. comprehensive as what US companies were. building. But there was a big loophole. And that loophole was that Nvidia could. sell chips to companies in Southeast. Asia. that those companies could then provide. access to that technology remotely to. Chinese companies. And as we began to examine Mega Speed, it was pretty clear they're kind of the. poster child for exploiting this.

loophole. >> How so? >> How so? I mean, in the span of roughly. two years, they had purchased more than. $4.8 billion in chips from Nvidia. I. mean, they went from being a company. that nobody knew of overnight to a. company that had become one of Nvidia's. largest customers in the region. [music]. And I mean, this was a company with. clear ties to China. So we wanted to learn more about those. ties and dispatched our colleague Paul.

Mozur from Taipei to Singapore to visit. the Mega Speed office. And when he. showed up, he found that there were only. two employees at the office. And when he spoke to them, they said. that most all of their customers were. Chinese and most of the executives were. Chinese and rarely came to Singapore. In. fact, most of them stayed mostly in. China. [music]. This was significant because at the time. Nvidia was telling us that Mega Speed. didn't really have ties to China.

Paul also went and found that Mega Speed. was owned by a shell company and he. visited the shell company and found that. it was based in an accounting firm, almost like a shell company mill. All of. this was mystifying for us. >> Unusual just because why would such a. big company be housed with an accounting. firm? >> Right. You're buying $4.8 billion of. chips. You would think you could spring. for your own office space, right? >> [music]. >> Right. So it sounds like you're finding there.

are a lot of questions to be asked about. this company's connections to China and. how it became such a major buyer of. these chips basically out of the blue. >> Yeah, absolutely. I mean, and as we dug. into this company and looked at it, we. found that they had aroused the. suspicions of the Commerce Department. and Commerce officials who are supposed. to track where chips are going around. the world. And so they dispatched. investigators to visit one of the data. centers. And when they showed up in. September of 2024, they found that Mega.

Speed still had a lot of the Nvidia. technology in boxes, which raised. suspicion that that technology was being. shipped in and then onward to. potentially China. It really raised the. prospects that this was a smuggling. operation, not just a data center. operation. >> Fascinating. >> And at the center of all of this was. this woman named Alice Wang or Wang La, a Chinese citizen, who claimed to be the. company's chief executive officer on her.

LinkedIn, and who had a biography that. detailed that she used to be a TV. journalist. And this just made us. question, how did she get all this. money? How did she come to be in charge. of this company? And then most of all, and most mystifying, how did she get so. close to Jensen Huang, the person who is. at the forefront of artificial. intelligence? >> How close a relationship are you aware. that they have at this point?

Like what do you know about that? >> We don't know a lot, but she's been. photographed with him on a few different. occasions and videoed with him at. various industry gatherings. And so we. do some reporting. We speak to a man who. took a photograph of them at an industry. party at a bar in Taipei. And there's a. photograph of Jensen sitting beside. Alice. uh as they prepare to toast whiskey. And. the gentleman who took the photograph is. a tech executive named Parker Schmidt.

And Parker got on the phone and he said, you know, the wild thing about that photo is we. were hanging out with Alice at this. party, and she said something to the effect of, I bet I can get Jensen here. And sure enough, a few minutes later, Jensen showed up. >> An indication that, I mean, she may have him on speed dial. or something like that at least. >> That was the way it was perceived by. others at this party. you got to remember like, this is in. Taipei. This is where he is rock star. among rock stars. And this is the.

industry that he is building and. leading. So to be able to in moments. summon the most important figure in the. industry really catches people's. attention. >> All right. So you drop this reporting. What happens? >> Not much. It's quiet. Nvidia keeps doing business with Mega. Speed. And we don't hear a lot for a while. And then at about a month ago, we hear. that our colleagues in Washington on the. National Security beat all of a sudden.

are hearing things about Alice Wang and. she's resurfaced in our universe. And we. start to do some reporting and it turns. out that she has been under US. surveillance for about a year if not. longer. And [music] in the course of surveilling. her and her communication, US Intelligence Services have determined. that she's a Chinese asset funneling. information [music] to Beijing.

>> A spy. >> A spy basically. [music]. And low and behold, who do they find out. she's in touch with? Jensen Wang. >> We'll be right back. All right. So you learn that the US. Intelligence Community has for the past.

year or so been surveilling this woman. that they suspect is a Chinese spy. They. know this woman is talking quite a bit. with Nvidia's CEO Jensen Wang. What do they come to know about the. nature of the relationship between these. two? >> They know that they have a very close. relationship, that they've obviously. been doing business together, and that. some [snorts] people in the Intel. community suspect that the relationship. is intimate. >> Hm. >> And this obviously.

sets off alarm bells within the US. government because. >> Right, you'd think. >> Jensen Wang over the course of the past. two years has gone from somebody who did. not even know President Trump. to one of President Trump's closest. allies who has a huge voice and. influence over US AI policy and who has. regular phone calls with the president. >> Right. >> Um they're in touch all the time. >> I mean, we saw recently. Jensen Wang was on stage at an event and.

he got a call from the president and and. took it live. So. >> Correct. >> they're clearly very close. And I assume. that the worry or the question on the. minds of these intelligence officers is. what is Alice Wang trying to get out of. Jensen and what is she managed to glean. from him? >> Right. And the US intelligence community. determines that she's working on behalf. of China's Ministry of State Security, which is essentially their CIA.

>> Wow. >> And they determine that she is trying to. learn more about American AI chips. In. other words, you know, Nvidia's magic. and potentially trying to influence US. policy [music]. on AI chips for China. In other words, encouraging Jensen to try to advocate. for China to get more AI chips. And the concern and the worry here is. she's incredibly close to him, which.

means she could have access to his. devices. She could be communicating with him at. all times. She could be weighing in on. issues in real time. We don't know. We. haven't seen the surveillance, but you. can imagine the type of questions that. the Intel community was agonizing over. as it was reviewing the surveillance. >> And so what do they do when they find. this out? Like, how do they respond to. this information? >> take it to the top. They briefed the. president on this about a year ago, and.

they let him know that. Jensen Wang has a relationship, a close. relationship with this woman who they've. determined to be a Chinese spy. And the president chooses not to do. anything. >> And when you say he decides to not do. anything, what do you mean by that? Like, what. exactly does that look like? >> Well, usually in circumstances like. this, what happens for a US citizen that. surface in surveillance in an.

intelligence operation like this is that. the FBI would provide a defensive. briefing for that individual, essentially notifying them and saying, hey, you need to be aware you have come. up in surveillance. We know the person. you're talking to is part of an. intelligence operation. We suggest you. probably presumably distance yourself. from them. In this instance, that is not what. happened. Jensen was not notified about. this. Nothing happened. Literally, the.

president took no action. >> Why? Why wasn't he notified? What what's. the justification for that? >> It's unclear to us in that time, in that. moment last fall, why the president. didn't take action. We don't know if that's because they. didn't want potentially Jensen Wang to. say something to her and then that kind. of pollutes the surveillance or, you. know, creates a situation where they're. no longer able to surveil her if like. that was a priority or if there was. something else going on, there's some.

other dynamic. I mean, there are many. variables at play. And we have to. remember he's a close ally of Jensen. Wang, and this is a president who is. very aware of how the stock market is. performing and the economy is. performing. And what is the one thing. driving both of those things? Artificial intelligence and Nvidia. >> Okay, so. Trump knows about it. The US government. knows about it.

What happens? What happens next? >> I I know we've said this once before, but not much. >> Huh. >> Fast forward to the spring and Marco. Rubio asked for an update on the. intelligence about the surveillance. And. he drops another memo and he makes it. more clear. that she is a Chinese spy, that she is. working for China's intelligence. services. And the timing of this memo is. shortly before. President Trump took off for his summit.

in Beijing with Xi Jinping. And when the US government pulls. together its list of executive delegates. to go on that trip, you have Tim Cook, you have other chip executives. It's. it's 17 person list. But there's one. name that's omitted and that is Jensen. He's not invited. >> Hmm. But if I'm not mistaken, Jensen. Wong does end up going on this trip to. China. So what happened?

>> Yeah, I mean, in the run up to the trip. to Beijing, there's media coverage about. Jensen not being there. The president. decides to extend a last minute. invitation to Jensen and Jensen flies to. Alaska, meets Air Force One on the. tarmac and boards and they take off. together to go to Beijing. >> Okay, so I think that brings us to a. couple weeks ago when you and our. colleagues published this bombshell. report saying that Jensen Wong was the. target of this Chinese spy plot. Is this.

when he first figures out that he's been. caught up in all this surveillance? >> Yeah, the day before we went out with. publication, we went to Nvidia and asked. them for comment. And one of the things. they said was that they were confident. that if the US government believes that. any person is a threat to American. industry, it would let us know. In other. words, the US government has not told us. about this surveillance. It has not told. us about this US intelligence conclusion.

that she is a spy. of this is news to them when we go to. them and ask them to comment on the. story. >> Did you talk to Jensen Huang himself? >> He didn't respond to our inquiries. directly. His company spokesman spoke to. us on his behalf. But Bloomberg News. spoke to him a day after our story. published. And one of the things that. Jensen said. in that interview with Bloomberg News. was he said that his interactions with. Ms. Huang had been related to MegaSpeed,

quote, and it was all completely normal. and not unusual, end quote. >> Basically, the company and Jensen Huang. himself are saying nothing to see here. There's nothing unusual about this. The. company is saying, look, if this was a. problem, we would have known about it. >> We would have been told. And by the way, this is just a chief executive having a. relationship with a customer like he has. relationships with thousands of. customers. It's not unusual.

But. their position doesn't hold because as. more and more. press comes out, the news begins to. tighten. And Jensen Huang. decides that he needs to confess. And so. over the course of this past weekend, he let the board. and every employee in the company know. that he'd been having an affair. with this woman. And one of the things. he says is, I was unfaithful to my wife.

My actions hurt her and our children. There is no excuse for what I did. I am. deeply sorry. >> And does he say in that email whether or. not he knew that this woman was a spy? >> No, he doesn't address that dimension of. it. In fact, what he actually does and. what the company does is that they say. he's going to continue to lead this. company, you know? It's both a note of. apology, but then also a note of. reassurance to the people who work. there, who really look up to him and.

idolize him and know that he is. absolutely critical to what that company. does. >> Well, and also to the stock market. presumably, right? Which is so dependent. on the health of this one giant company. >> Right, and which all of the sudden has. to. make sense of this new fresh doubt about. whether or not Jensen Huang will be. leading this company going forward. And. while the board tried to reassure the. market by saying that it doesn't think. once again that there was anything. problematic, that no classified.

information was shared with her, etc., what the board has decided to do is open. an independent investigation into the. relationship. And this whole concept of. Jensen's leadership of Nvidia being open. to scrutiny raises fresh doubt about the. leadership of the company. >> So in this investigation, I have to. assume that part of what they're looking. at here is the question that we all. have, which is how successful was Alice.

Huang? Was she able to influence Jensen on USAI. policy? And in general, how much. information was she able to glean from. him? What do we know about those two things? >> This investigation's going to have to. run the gamut from the micro questions. to the macro that you just raised. And. the micro ones are. what was the nature of Nvidia's business. dealings with Megaspeed? All of a. sudden, that needs to be investigated by. the company itself. And then on the. macro side, it's how successful might.

she have been in influencing Jensen. Huang's policy position and his advocacy. in Washington because that's something. that the company has also had a stake in. and been invested in as well. And on. that issue, we know that Jensen's. position on selling chips to China has. not changed. Jensen Huang has been consistent in. advocating to sell more chips to China.

throughout this kind of AI boom period. >> Right. >> He really believes. that in order for the US to remain. preeminent in artificial intelligence, that the only way to do that is to. prevent Chinese companies from. developing competing chips that they may. sell for less or that may out perform. what Nvidia and AMD and others produce, which are right now by far and away much. better in terms of like the power they.

consume and the performance that they. offer compared to what the Chinese. offer. >> Right. You've You've talked about this. on the show before that Huang has long. wanted to remain dominant in this market. and that he believes the way to do that. is to sell chips to China so they become. reliant on US-made chips. And what. you're saying it sounds like is that. it's hard to parse whether Alice Huang. was influencing Huang when this is. something that he kind of already wanted.

to do, sell to China. >> That's completely right, but there's a. caveat here, right? Now we have to look. back at this entire two years of. advocacy and lobbying and we have to. look at it through a new lens with a new. piece of information. And that is that. while he was pushing for this, he had a. Chinese mistress with a vested interest. in those same objectives. >> Trip, you told us earlier that this. company Nvidia is really run by this one.

man, Jensen Huang, that he has a ton of. control, maybe more than most CEOs over. this one company, which I'd imagine puts. the board in a pretty tough spot as they. go to investigate this. You'd think there are a lot of. incentives there to not. want to rock the boat, to disrupt the. company's leadership. >> Correct. This is a board that has been. very deferential to Jensen. and they've been deferential for a. reason. I mean, this guy took this. company from being worth less than a.

trillion dollars a few years ago to. being worth more than 4 trillion. dollars. In the process, he's made a lot. of these board members really, really. wealthy as well. Because a number of. them were early investors in Nvidia. They bankrolled it at the outside. Nvidia is set up with a single point of. failure. I mean, he has. 60 direct reports. There's no clear. successor. And there's no real plan B. So the repercussions, like could he be. fired? Could he be suspended? We could.

kind of puzzle over like those outcomes, but it's really hard to think that. that's where this ends up given the. nature of this board and given the. importance he holds for the future of. that company. >> What about for President Trump? Has any. of this had an visible impact on Jensen. Wong's standing with the president? >> At this moment, it seems like water off. a duck's back. I mean, he spoke on.

Sunday after Jensen Wong revealed that. he'd had the affair. And he defended Jensen. He said that he. would probably take him on the next trip. to China. >> Oh. >> And he also said quote, I haven't heard. he's done anything wrong. He dealt with somebody, but you know, so. does everybody else. >> Meaning. this kind of stuff just happens. That's. what the president is saying. >> I guess so. >> I want to ask about the timing of all of. this because now we have these new.

Democratic majorities coming into. Congress in January. That seems as though it could lead to a. more aggressive approach in Washington. toward all of this. What should we expect? >> I mean, the timing of this couldn't have. been worse if you're Jensen Wong. I. mean, the Senate just flipped. And that. means that the Democratic senator from. Massachusetts, Senator Elizabeth Warren, is going to be taking over the Senate. Banking Committee. They have. responsibility for uh export of chips.

abroad. And, she will have the gavel and there's. almost, I don't know, 100% chance that. she asks him to testify. She's already. asked him to come in and brief the. Senate Banking Committee earlier this. year, and he declined. I mean, we may be. at a point now where he doesn't have a. choice. And then if you step back even. further before she even gets the gavel, we just had a midterm election where. most of America sent a strong message to. Washington that it was.

fed up with Silicon Valley's influence. over Washington policy, particularly on. AI. And Jensen Wong's the face of AI. So, anybody looking to score points. right now, whether it's Republicans or. Democrats on tech before the end of the. year, they have somebody they can bring. in. And we've already seen three. Republicans say that they want a. briefing from Jensen. So, this is coming. fast and it's changing and taking shape. in real time.

>> All right. I have what may seem like an. intentionally provocative question here, Trip, but bear with me. If it turns out that this woman that. they suspect is a Chinese spy didn't. actually glean all that much from Wong. and that Wong pushed for a more lenient. US policy towards selling chips to China. because he wanted to, not because of her. influence, what then. would be the damage.

that has been done from all of this? >> He's been compromised. How can lawmakers, people in the Trump. administration listen to him and not. have this in the back of his mind? It it. sows doubt for everyone about what he. says, whether he's being honest. And it also shows that he's vulnerable, right? I mean, this is a guy that had an. Midas touch. He could do no wrong the. last three years. And this is a major.

misstep. A A misstep could wind up. forcing him to spend time in the coming. months and next year, testifying about the past rather than. focusing on deciding and designing the. artificial intelligence chips and. [music] the artificial intelligence. changes of the future. This is a real inflection point [music]. for the company,

for the US economy, for artificial intelligence, because we don't know what lies ahead. after this point. The way we see Jensen Wong has changed. forever. >> Well, Trip, thank you so much. [music]. It's been a pleasure. >> Thanks for having me.

>> [music]. >> We'll be right back. Here's what else you need to know today. >> Impeaching Peter Brian Hegseth, Secretary of Defense for high crimes and. misdemeanors. >> On Monday, [music]. Representative Thomas Massie moved to. force a vote on impeaching [music]. Secretary of Defense Pete Hegseth. Massie, the Kentucky Republican who said. to leave Congress after losing his.

primary in May to a challenger backed by. President [music] Trump, introduced. eight articles of impeachment against. Hegseth. [music] The resolution said. that Hegseth had abused his authority on. many fronts, accusing him of violating. federal law by carrying out the war with. Iran without congressional authorization. [music] and carrying out unlawful. strikes against drug traffickers in. Latin America. Hegseth has rejected the allegations, [music] calling the impeachment effort a. political sham.

If the House approves the charges, the. measure will go to the Senate. And [music] California voters rejected. Proposition 40, killing a measure that. would have created [music] the nation's. first wealth tax. The proposal would have imposed a. one-time 5% tax on the personal assets. of billionaires in the state and devoted. most of the revenue to healthcare. [music]. But it suffered from having a weak. coalition of supporters who couldn't. compete with the well-funded ad campaign.

attacking the [music] measure. Today's episode [music] was produced by. Olivia Nat, Lexi Dio, and Eric Krupke. It was edited by [music] Paige Cowett. and Liz O'Baelen. Contains music by Dan. Powell, Rowan Nimisto, and Marion Lozano. [music] and was engineered by Alyssa. Moxley. Our theme music is by Wonderly. Special thanks to Anna Swanson. [music].

That's it for the Daily. I'm Natalie. [music] Kitroeff. See you tomorrow.