On the surface, the Jensen Huang case was about a personal affair that damages the company’s reputation. But now the case is turning into something far more serious. The question is whether Jensen Huang knowingly and wilfully allowed his mistress to export the most advanced computer chips to China, in direct contravention of the Trump administration’s regulations. Nor are we talking about small volumes. Chips worth 7.5 billion dollars were exported.
We are therefore talking about a breach of national security interests.
These considerations have prompted a group of shareholders to take legal action.
The lawsuit has been filed in a federal court in California. Nvidia is accused of downplaying the consequences this diversion could have for US national security, thereby contributing to an artificial inflation of Nvidia’s share price.
The arrangement is said to have contributed to the export of computer chips worth 7.5 billion dollars to China, according to industry publication The Information.
Alice Huang is alleged to have built a network of companies in China and Singapore to purchase Nvidia computer chips with her husband and sister.
According to The Information, the businesswoman used her connections to Jensen Huang and Nvidia to secure supplies of computer chips for the companies in her network, even as the US imposed strict export restrictions.
Both the company itself and the US Federal Bureau of Investigation (FBI) have launched investigations into Jensen Huang. He has also been summoned to a congressional hearing on the matter.
Since the weekend, the company’s market capitalisation has shrunk by as much as 400 billion dollars – approximately 4,000 billion kroner.
The share price fell by 4 per cent on Monday, and by Tuesday evening it had fallen by a further 6 per cent. (NTB)
A scandal can bring down a CEO, but not a company. However, if the CEO has betrayed the country in which the company operates, the situation is quite different.
