The resignation and the context
Jensen Huang resigned as chief executive officer of Nvidia on Thursday, a few days after admitting to a relationship with an executive at a Chinese data center company who, according to U.S. intelligence, was reportedly a Chinese government agent. The New York Times also reported on Wednesday on a second relationship with an Nvidia executive. The board of directors named Chief Financial Officer Colette Kress as interim chief executive officer until a successor is appointed.
The affair, reported by Rest of World, bears on Nvidia's role as the world's leading chipmaker and as a supplier, investor and reference point for the entire AI industry. The consequences concern China, which has not yet replaced Nvidia chips with domestic alternatives, but also Taiwan and South Korea, where a vast supplier network is concentrated.
Chips, controls and the Chinese market
Huang was the leading advocate of selling chips to China, arguing that it helps the United States maintain market dominance. Despite the U.S. ban on exporting advanced Nvidia chips to China, Chinese companies have sought to access chips remotely through data centers in Southeast Asia. Alice Huang, the executive involved, worked for Megaspeed, a Singapore-based data center company among Nvidia's largest customers in Southeast Asia; according to The Information, she helped move about 240,000 H100 and H200 chips and some A100s to China, and her companies reportedly invested in DeepSeek while promising Nvidia chip supplies.
The scandal could prompt the U.S. government to tighten chip controls. In anticipation of a crackdown, Chinese AI labs are seeking to secure foreign supplies of Nvidia chips, while traders in China are stockpiling restricted chips, according to Reuters. In the first half, Nvidia shipped 678,000 AI accelerators to China, down 44% year on year and equal to 34% of the market, according to IDC as cited by Reuters. In the same period, Huawei shipped 572,000, up from more than 300,000 and equal to 28%; Alibaba's T-Head had 7%, Cambricon 5%, Baidu's Kunlunxin 4% and Hygon 3%.
The technology gap and Asian partners
Despite advances in Chinese chips, most AI developers still train new models on Nvidia chips. According to research firm Epoch AI, Nvidia's B300 offers 6.75 times the arithmetic performance of Huawei's best Ascend 950 chip, which also lags in production volumes.
Huang is hugely popular in Asia, particularly in Taiwan, his birthplace, where he announced plans to invest $150 billion a year. Many internet users expressed disappointment at the loss of a tech role model; some noted that the espionage allegations and criticism of Huang could fuel discrimination against Asians in the U.S. tech sector. The resignation creates uncertainty over relations with Asian suppliers, but several executives at Taiwanese suppliers expect stable orders in the coming years thanks to sustained demand from the AI sector, according to Taiwan's Central News Agency.
