Commentary: Jensen Huang Is bigger than Nvidia – and it’s a problem

Jensen Huang, CEO of Nvidia, is facing a major scandal that is causing ripples throughout the artificial intelligence industry. The high-profile CEO is currently embroiled in an affair with an alleged Chinese spy, a revelation that has sent shockwaves through the chipmaker and the broader AI world. As investors grapple with the potential fallout, the question arises: could the central banker of AI be bigger than the company itself?

Nvidia is currently the most valuable publicly traded company, boasting a market capitalization of $4.5 trillion. The company's influence extends beyond its financial might, as it has also provided $300 billion in financial support to its customers and invested billions into startups, many of which are neoclouds or data center operators. Huang, despite holding only a 3.4% stake in Nvidia, is the driving force behind the company's strategies, with no clear successor in place.

The scandal comes at a particularly inconvenient time for Nvidia and its customers. As neoclouds like CoreWeave face skyrocketing borrowing costs and dwindling financing channels, they are increasingly relying on Nvidia for support. However, with Huang's authority now called into question, Nvidia's dealmakers may become more cautious and hesitant to extend financing to their customers, which could exacerbate the chipmaker's credit profile.

This could lead to a slowdown in billion-dollar deals, as lenders scrutinize the risks associated with Nvidia's debt obligations.

The situation is further complicated by the involvement of a Chinese woman, the alleged spy, who worked for Singapore-based Megaspeed International. This company has been building data centers in Southeast Asia and has leased computing power to Alibaba Group, providing a potential backdoor for China to access advanced Nvidia chips. As national security concerns escalate, Asian banks and investors may become more cautious about financing chip-related projects and funding data center infrastructure in the region.

Huang, known for his charismatic leadership and bullish predictions about the future of AI, now faces a tarnished reputation as his star power wanes. The AI trade is bracing for a potential bear market as investors question the sustainability of Nvidia's growth trajectory and the viability of its customers. The scandal surrounding Huang and the broader implications for Nvidia's business could lead to a slowdown in billion-dollar deals, exacerbating the chipmaker's credit woes and casting doubt on the future of the AI infrastructure industry.