- 12 minutes ago
Experts analyse Jensen Huang's Nvidia exit amid national security issues and geopolitical tensions, focusing on chip export bans and AI market dominance.
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00:00And joining me now is Ross Feingold, who is an Asia Political Risk Analyst.
00:07We also have Enes Napinai, Senior Advocate of the Supreme Court and Founder of CyberSathi.
00:13Let me, we also have Richard. I can see Richard Sanders also joining us.
00:17He is former member of the U.S. Department of State's Senior Foreign Service.
00:23He is a foreign policy expert.
00:26I'm going to begin with you, Ross.
00:28What changes between China and U.S. now?
00:34Has Jensen Huang's departure fundamentally changed the equation now between U.S. and China?
00:44And is NVIDIA's China business now a national security liability for the United States?
00:51Well, one thing to keep in mind is actually in recent years, the legal channel for NVIDIA to sell its
01:01chips to China had all but evaporated.
01:04First, there were restrictions imposed by the United States.
01:08This was followed by a partial relaxation by President Trump.
01:12But subsequent to President Trump's relaxation, China basically told the potential buyers within China, we don't want you to buy
01:22NVIDIA chips.
01:23Now, all that being said, if we put aside the revenue opportunities or lost opportunities for NVIDIA, there's certainly significant
01:34U.S.-China relations and competition issues that are at stake here.
01:40One, it's very clear that chips were illegally trans-shipped to China.
01:47And there are already people who are under indictment in different countries for engaging in those activities.
01:54So that was a clear criminal violation of U.S. law, and the U.S. government is pursuing that.
02:01The other issue here, which we simply don't know the answer to yet, is what, if any, information Mr. Wong
02:09may have shared with Ms. Wong about market outlook, about his discussions with U.S. government officials, including potentially President
02:18Trump.
02:19And if he did, and again, we don't know that he did, but if he did, did she then share
02:25that information with the Chinese government that we simply don't know either at the moment?
02:31So there are a number of aspects that certainly require additional investigation.
02:37Now, as far as when President Trump meets President Xi next week, I don't think this topic will be something
02:45that they discuss, because ultimately, President Trump could only say, we don't want you to violate U.S. law by,
02:52for example, buying chips that are banned for export to China.
02:56But Ross, given how Donald Trump is defending Jensen Huang, it, you know, it's highly unlikely that he will not
03:06erase it with Xi Jinping.
03:09Let me bring in Enes Nappinai.
03:11Ma'am, when a CEO controls a company central to global AI infrastructure, can a personal scandal become a national
03:19security threat?
03:20And where does corporate responsibility begin?
03:25So this is actually a very complicated question.
03:29I'll try to simplify it as much as I can.
03:32The first and foremost thing is, unlike in India, in the U.S., fundamental rights are absolute.
03:38So you would assume that you would have a free ride in terms of your free speech, expression, privacy, etc.
03:47But having said that, what happens, and this is not something new, what happens with most corporates is contractual responsibilities
03:56and liabilities are mounted on particularly top management,
04:00because what they do, including in their personal lives, can impact the company, can impact its rights, its, you know,
04:11profits, etc.
04:11A critical case of causes of, you know, for illustrative cases are where top management has been held liable for
04:20violation, though it was their private lives,
04:23where there were accusations of sexual harassment, for instance, where the company has very clear policies which says you cannot
04:31have a relationship internally.
04:33Similarly, similarly, when you talk about national security, always national security trumps all.
04:41And here we are talking about a company which is involved in technology and the issue that has been raised,
04:48it is still subject to proof.
04:51So I would qualify it with that and say that we are still awaiting proof of whether indeed it has
04:57been a national security threat.
05:00But if it were, then the country would be well within its rights to initiate action and that could be
05:09contingent on what are the laws that they will be applying and what they say is likely to be a
05:15violation.
05:16But ultimately, everything gets pegged to a contractual responsibility or liability, which makes it easier whether it is in terms
05:23of corporate rights or with respect to national security.
05:27But Ms. Nabi Nai, will that truth ever come out?
05:30Because we only know two facts here.
05:34First, I mean, what is there in the public domain?
05:36Of course, there's a lot of reporting which is happening of an alleged third affair, an alleged understanding that the
05:45lady in question has gone back to Beijing,
05:48that there was some underhand dealing between her husband and others.
05:51So it's very complicated.
05:54And with every passing day, the scandal seems to be getting more murkier.
05:58Do you think we'll know the truth ever?
06:00What really happened?
06:02Was she really a spy?
06:04Yeah.
06:04The good news is that unlike, you know, physical world evidence, electronic evidence always leaves a trail.
06:11But I think I called it in my book, no, I call it the breadcrumb trail, as in Hansen and
06:15Gretel.
06:16Because if you catch the trail early, you have it.
06:20If you leave it too late, you may miss it out.
06:23Okay.
06:24Richard, come in now.
06:25If NVIDIA's leadership is vulnerable, its supply chains are exposed and China is catching up,
06:32then can America realistically maintain its artificial intelligence supremacy?
06:39Do you think that is under threat now?
06:46Richard, if you heard me.
06:50I think we need to see exactly where this is going.
06:55This is a classic Washington scandal that has everything.
06:58It has high tech, it has high politics, it has vast amounts of money, it has sex,
07:06it has international affairs at the most intense layer.
07:10So we're just only now beginning to see where this is going.
07:15But it is entirely correct that this is going to have ramifications throughout the artificial intelligence industry,
07:23really throughout the global economy.
07:25We have to remember, NVIDIA is enormously important for the creation of these so-called frontier chips or accelerators.
07:37It has got a dominant role in this.
07:4180% of these chips that essentially educate artificial intelligence models are produced by NVIDIA.
07:50It has a capitalization of $4 trillion.
07:55So to the extent that NVIDIA starts to look like it's in a more complicated situation,
08:02we are going to see ripple effects throughout the industry and onto the various countries in Asia
08:11that have essentially become aligned with it, whether it's South Korea or Malaysia.
08:16There are others that actually produce the physical chips that NVIDIA is designing.
08:22And it all comes at a time in which internationally and certainly in the United States,
08:27there's a great deal of concern over what exactly artificial intelligence is leading us to.
08:34We see concerns at one end during the U.S. elections, the whole question of data centers had become a
08:43zoom to the top of the American public's concerns.
08:47And beyond that, the question of, you know, what will artificial intelligence do to our jobs?
08:54So if in the middle of all this, a scandal arises that has to do with the largest company in
09:01this sector,
09:04with this dynamic leader who seemed to have an extremely close relationship with the president of the United States,
09:12it is going to have very, very interesting effects, to put it mildly.
09:17You have actually put it quite well when you said that this is a perfect Washington scandal.
09:25So Richard, help us understand, with Howard Lutnick also facing scrutiny,
09:31is this exposing a deeper failure in the Trump administration's China and semiconductor policy?
09:42In all fairness, these are difficult questions.
09:47The United States certainly has identified this kind of technology as an area in which it wants to maintain dominance.
09:55The question is, how do you do it?
09:57Do you essentially try to completely restrict provision of these highly powerful chips to China
10:06and thus kind of keeping it further behind?
10:09But if you do that, aren't you just encouraging China to develop its own industry much more rapidly than it
10:16otherwise would?
10:17So these are genuine dilemmas.
10:20The question is, is this being resolved and analyzed in a straightforward, arm's length kind of way?
10:28Or are our personal connections between Jensen Huang and senior White House officials influencing the analysis that we're taking to
10:38it?
10:39Certainly, President Trump has made it clear that he thought that Jensen Huang was a great leader.
10:45And he was, you know, really up until Huang's resignation, he was apparently urging him to stay on.
10:52Howard Lutnick, the Secretary of Commerce, has been the point man on our policy involving chips and China.
10:58And the question now is, did he essentially ignore the views of others within the United States government,
11:05of the Secretary of the Treasury, Besant, of Secretary of State, Marco Rubio,
11:11and really sort of push not to impose the kind of controls that other very, very powerful and senior people
11:20in the U.S. government were arguing for?
11:24Ross, so tell me, I mean, Jensen Huang has exited the company from the role of the CEO.
11:32I mean, at present, he's no longer the CEO.
11:35Donald Trump has taken to social media and has made this big announcement that it will be Tim Cook who
11:41will be taking over the reins.
11:42What happens to NVIDIA and should the NVIDIA board have given Jensen Huang perhaps a second chance?
11:52Had some kind of faith or perhaps even waited for the investigation to conclude?
12:00With the investigation still ongoing, why ask Jensen Huang to resign?
12:09First of all, I would take with a grain of salt President Trump's comments about Tim Cook.
12:16I have no idea whether Tim Cook is interested in taking over NVIDIA or whether the NVIDIA's board is interested
12:24in him doing it.
12:25To me, that sounds like an interesting idea that the president had, but whether it will have any effect in
12:32the real world is something I would want to wait to before I gave any credence to that.
12:39You know, what the board of NVIDIA should or should not have done is a very complicated question because a
12:48firestorm has been raging internationally at the highest levels of politics, at the highest levels of markets around the world.
12:57I'm not sure that simply trying to ride it out and say, well, we'll wait and see and we'll do
13:03our own investigation, which will take time and a law firm engaged, et cetera, would have been really feasible.
13:10We're already seeing in the United States Congress getting engaged.
13:14They were seeking to subpoena Jensen Huang to testify.
13:18You know, complicated legal issues, including criminal liability, seem to be raised at this point.
13:24So I'm not sure that it really would have been feasible to say, well, we're just going to wait and
13:29see.
13:30OK. Ross, what do you think?
13:32Ross Feingold, this is a question to you.
13:35Well, as far as the interactions with the board, yeah, a lot of people are saying that the board of
13:42directors should have given Mr. Huang a second chance.
13:46But like so much else surrounding these events, we simply don't know what the discussions were between Mr. Huang and
13:55the board of directors.
13:56So to give one very direct but simple example, if they had asked him, is there anything else you need
14:04to tell us?
14:04Any other extramarital affairs or other things you have done that might affect the company, the credibility of the company
14:15in the public markets, reputational risk for the company?
14:18And if he didn't disclose those, but then hours or days later, we had this news about a relationship potentially
14:26with an employee that reports to him,
14:30then there are going to be people on the board of directors who would say, well, we asked you a
14:34question and frankly, you weren't forthright with us.
14:37And that would be an offense where you'd have to say that the board of directors would terminate him.
14:45So, you know, we simply don't know what the discussions were and what information the directors had that prompted them
14:54to then say, well, you told us something,
14:57but we still feel we have to protect the company and the shareholders, and thus we have to push you
15:04out of the company.
15:06I think we'll find out eventually if that was the case, but it's certainly a possibility.
15:11Okay, Enes Nabi Naib, try and sum it up for us, you know, because I'm trying to understand.
15:16Has the board, NVIDIA board, cut its losses by seeking the resignation of Jensen Huang, or have they landed themselves
15:24much in trouble?
15:25Because here is the chief executive, who is the founder, who is the visionary, who is the chief salesman.
15:30And he is everything that NVIDIA is today.
15:33And for him to exit, what will be NVIDIA without Jensen Huang?
15:43Ms. Nabi Naib, if you heard me?
15:46Yes, I'm sorry. I thought the question was to someone else.
15:49Well, you know, in terms of corporate responsibility and the way a corporate entity is structured,
15:59first and foremost, whether you are a founder or a promoter, once you have shareholders, external shareholders,
16:06once you are answerable to others, then that role that you envisage as a founder gets diluted.
16:14So, your rights or your entitlements get subsumed to those of the larger group, you know.
16:20It could be of the stakeholders, it could be of your vendors, the customers, etc.
16:25So, today, when you are looking at it from a legal perspective, I don't want to venture into the political
16:31aspects of it.
16:32And there are quite a few nuances there.
16:34But sticking to the legality of it, he has exited.
16:38So, it's kind of like a bloodless coup.
16:42But whether that's going to spell well for the company or not, only time can tell.
16:47But again, an exit from a particular role may not necessarily mean an exit from the company itself.
16:53He would continue to be a shareholder.
16:55He would continue to contribute.
16:57The issue really here is, I think the takeaway here is this.
17:03When you have a technology company, when that technology has far-reaching consequences,
17:10when you have customers who are probably government entities,
17:13your role and responsibility is much higher than that of any other CEO or a top management person.
17:22You need to exercise an extra level of caution as an individual.
17:26The company needs to exercise a higher level of protective measures, guardrails,
17:32through their policies and internal functionalities and cross-checks and verification processes.
17:38And any external entity, including a government which engages with such companies as a vendor,
17:46will have to evaluate what we call the weakest link in the technology chain too.
17:54Is this going to be a weak link and how is it going to impact them?
17:58I think these kind of preventive or protective measures will go a long way in terms of assuring
18:03cybersecurity, in terms of corporate permissibilities, some transparency and clarity in terms of what
18:13happens when something goes wrong and having a process-driven methodology instead of a knee-jerk reaction would be a
18:21better alternative.
18:23Just 30 seconds to you, ma'am, as well.
18:25Do you think the artificial intelligence ecosystem changes forever?
18:31With this case, I don't really think so.
18:34We have seen so much of AI bias already talked about.
18:38We also know that this AI bias can be manipulated and that's the kind of situation we are looking at
18:46today.
18:47Does it mean we are going to eschew this technology?
18:50Certainly not.
18:51This is here to stay.
18:53AI is here to stay.
18:55Usage and adaptation to AI is going to continue.
18:59How far we put in guardrails, how careful are we going to be is something that I hope will change,
19:05but I am very doubtful that it really will make a difference.
19:09All right.
19:10Thank you so much for your time here, Ms. Napini, Ross Faingold and Richard Sanders.
19:14Of course, there are several chapters in this scandal which is yet to unfold.
19:18A story we will continue to track very, very closely.
19:21Thanks so much for watching.