LEILA FADEL, HOST:
News that the AI chipmaker Nvidia is investigating its own CEO is reverberating from Wall Street to Capitol Hill.
STEVE INSKEEP, HOST:
The company's stock slipped yesterday after the CEO, Jensen Huang, admitted to having an affair. News reports say it was with a woman that U.S. intelligence agencies suspect of spying for China.
FADEL: NPR tech correspondent John Ruwitch joins us now to talk about this. Hey, John.
JOHN RUWITCH, BYLINE: Good morning.
FADEL: Good morning. So just how bad has the fallout been so far for Nvidia?
RUWITCH: Yeah, it's not great. Nvidia's share price dropped around 4.25% yesterday. Meanwhile, Nvidia's main competitor in AI chips - the No. 2 player, AMD - leapt more than 13% on the news. Three committees in the House of Representatives have summoned Jensen Huang to a joint closed-door session next week to answer questions about the allegations. You know, Nvidia has a huge market share in the chips that are used to build and run AI. But a question that, you know, investors are starting to think they may have to grapple with is, if this snowballs, what does Nvidia look like without Jensen Huang at the helm? I mean, he cofounded the company and put it on the map.
FADEL: Now, President Trump is friendly with Jensen Huang, and as you've...
RUWITCH: Yeah.
FADEL: ...Reported, has traveled to China with him recently. What's Trump saying about all this?
RUWITCH: Well, the president says he's known Jensen Huang for a long time. People I've spoken with say Huang has been a prominent voice in Trump's ear on AI policy. There are export controls in place that prevent cutting-edge chips from being exported to China, and Huang has been a critic of those controls. Yesterday at a press conference, Trump called him an honorable guy and said he thought he'd be in good shape in all this. And he said the two had actually talked by phone.
(SOUNDBITE OF PRESS CONFERENCE)
PRESIDENT DONALD TRUMP: I asked him today - because I did speak to him today just to see if he's feeling all right - how are you doing? And I asked him about that. And he said he had absolutely no idea that the person in question was a spy.
RUWITCH: Whether or not Huang knew the woman that he admitted to having an affair with might've been on Beijing's payroll is kind of beside the point, though. Nvidia is at the heart of the competition between the U.S. and China over AI. So it's not really a stretch to think that Beijing would be interested in just about anything Jensen Huang says or that his company does.
FADEL: Now, I know there's been some reporting that U.S. government agencies had concerns about Nvidia's best chips getting into China for some time. What have we heard about that?
RUWITCH: Yeah, at the center of all this is the question of whether a company Nvidia was working with was helping Chinese firms get around chip export controls. That company is a Singapore-based company called Megaspeed, and the woman Huang admitted to having an affair with was an executive there. The New York Times has reported that Megaspeed was being investigated here in the U.S. by the Commerce Department, and that the woman was passing information to Beijing. It said the president was briefed on it and chose not to do anything. NPR has not independently confirmed these reports. I reached out to Megaspeed and haven't heard back, but they previously have denied any wrongdoing.
President Trump was asked yesterday if he knew about this case when he went to Beijing in May, a trip that Jensen Huang was also on, and he said no. I reached out to the White House and the Commerce Department to ask what actions they took once they were aware of the intelligence on the company and the woman, but I haven't heard back.
Chris McGuire worked on AI in the National Security Council for the Biden administration, and he's now with the Council on Foreign Relations. He says it'll be crucial to find out who knew what, when.
CHRIS MCGUIRE: The biggest story here and the most lasting story is why the government sat on this and did nothing.
FADEL: So where do things go from here? I mean, how secure is Jensen Huang at Nvidia?
RUWITCH: Nvidia has said that even though it's conducting this investigation, its board has no reason to believe that national security or corporate secrets were compromised. The board has said it has confidence in Huang. And so he's still in charge for now.
FADEL: That's NPR's John Ruwitch reporting from Silicon Valley. Thank you, John.
RUWITCH: You bet. Transcript provided by NPR, Copyright NPR.
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