The consequences of Nvidia CEO Jensen Huang's affair; How to avoid the loss of reputation and/or wealth; Making a lot of money increases the odds of divorce; My dad's pacemaker

1) Bill Gates, Leon Black, Harvey Weinstein, Roger Ailes, Les Moonves, Steve Wynn, Sean "Diddy" Combs... The list of business leaders caught up in sex-related scandals or crimes is almost endless.

Now Nvidia (NVDA) CEO Jensen Huang has joined the list with his affair.

It boggles my mind that someone so brilliant could be so stupid. It should have been instantly obvious to him that businesswoman Alice Huang was a Chinese spy luring him into a classic "honeypot" trap.

And it wasn't just a one-time indiscretion – this relationship went on for years.

The two reportedly met in early 2024 at an annual Nvidia event, where Alice Huang was representing Megaspeed. Here's how the Wall Street Journal describes the company:

Spun out of a Chinese videogame company in 2023 and based in Singapore, Megaspeed advertises itself as a cloud provider of Nvidia hardware for the Asia-Pacific region. According to a November 2023 letter posted on its website, Megaspeed became a member of an Nvidia partnership program, a status that typically grants priority access to the latest chips.

The company acts as a middleman in the global AI trade, connecting companies, led by Nvidia, that develop hardware to the companies that need computing power for AI. Chinese tech company Alibaba, a leading developer of AI models, was an early Megaspeed customer and remains a major one, according to people familiar with the matter.

Kudos to activist short seller Culper Research, which published a report on May 13 that hinted at the personal relationship:

Nvidia CEO Jensen Huang has not only vouched for Megaspeed, but seems to have quite literally walked alongside Megaspeed at every step, while maintaining an uncomfortably close relationship with Megaspeed's Alice Huang, a Chinese national. He was first spotted partying with Alice Huang in June 2024 – the same month the Apex/Alibaba pledge was filed. He then dined with Alice Huang in Taiwan in May 2025 – just weeks after the news of U.S. trade restrictions. Finally, per one current Megaspeed employee, Jensen visits Megaspeed-linked data centers "every few months" and "every single time" he visits, he is accompanied by representatives from Alibaba. The Megaspeed employee characterized their relationship with Jensen as "very close", corroborating another former Nvidia employee's suggestion to us that many Nvidia employees wondered if there was a special relationship. The same employee added that, in contrast to public reporting suggesting otherwise, Alice Huang is "actually still our boss."

Far worse for Nvidia, Culper's report made a compelling case that Megaspeed is a front company – likely one of many – established to circumvent U.S. sanctions and funnel Nvidia's most advanced chips to China:

Nvidia claims that its business in China went to "zero" after April 2025 U.S. trade restrictions. We believe that in reality, over 20% of Nvidia's FY 2026 compute revenues remained driven by China – supported both by illegal GPU diversion and Southeast Asian intermediaries.

Nvidia has repeatedly vouched for Megaspeed – its single largest Southeast Asian chip buyer currently under investigation by both U.S. Commerce and Singapore authorities – as "wholly owned and operated by a company based and headquartered outside China, with no China shareholders." Nvidia has also claimed that it has "repeatedly tested and sampled data centers around the world and found no diversion." Documents we uncovered, however, suggest that Megaspeed has been secretly financed by Alibaba via a series of apparent shell companies. Tellingly, Nvidia's lawyered phrasing – that Megaspeed holds no Chinese equity – doesn't seem to preclude Chinese financing.

Megaspeed's financial statements reveal that from year-end 2023 to year-end 2024, its balance sheet exploded from just $33 million to $3.0 billion in total liabilities and equity, driven almost entirely by $2.9 billion in "refundable deposits received" from an un-named source. Megaspeed's financials also show $2.9 billion in "amounts due from subsidiaries" – money that it forwarded onto its operating subsidiaries such as Malaysia-based Speedmatrix.

The media is focusing on Jensen Huang's lobbying to ease sanctions on China and the possibility that he could have revealed industry secrets to his paramour. But they're missing the much bigger story – his possible evasion of massive sanctions.

This is a big deal. It's hard to think of anything more important to our national security than controlling who has access to the chips that underlie AI.

This scandal reminds me of Lumber Liquidators more than a decade ago. It was working with shady Chinese middlemen to import toxic flooring that violated U.S. environmental laws. I exposed what the company was doing in a 60 Minutes segment with Anderson Cooper that aired on March 1, 2015 (video here and transcript here). The CEO resigned, the stock collapsed, and the company eventually filed for bankruptcy.

I don't expect such dire consequences for Nvidia – it's a far larger, more profitable, and influential company. But if facts emerge – and they will emerge – that Nvidia was jeopardizing our national security, the company could face severe sanctions. And if Jensen Huang knew about it (how could he not?), he could go to prison.

Since Culper released its report, Nvidia's stock is down around 27%. And it likely has further to go, as I believe there will be many more shoes to drop in the Huang/Huang scandal. And the AI bubble is bursting, which will no doubt add to the weight of Nvidia's decline.

Remember, as I've said dozens of times, always listen to short sellers – in fact, actively seek them out – and carefully consider their bear case. They're not always right, but it's critical to listen to both sides of an argument before forming an opinion.

2) This scandal reminds me of one of the five calamities that I wrote about in my book The Art of Playing Defense – "Loss of Reputation and/or Wealth." You can read this chapter as a PDF here. Excerpt:

If you're in the professional world – if you are, for example, a doctor, lawyer, or businessperson – your greatest asset other than your brain is your reputation, for how hard you work, your sense of decency, and most importantly, your integrity.

Cherish and protect it because, as [Warren] Buffett once said:

"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.

"I want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front of their local paper, to be read by their spouses, children, and friends, with the reporting done by an informed and critical reporter."

You need to be especially careful of your reputation if you're a public figure, on whom the scrutiny is greater...

One misjudgment is all it takes, so avoid gray areas. Never go near the line. Be ultraconservative when it comes to your integrity and reputation.

3) Another chapter of my book addresses the calamity of "A Bad Marriage, Often Ending in Divorce." The Huang/Huang scandal reminds me of a section of this chapter on how making a lot of money increases the odds of divorce (focus especially on No. 2):

1) Divorce is crazy expensive, so having a lot of money removes this barrier.

There is both the short-term cost of lawyers and the long-term higher expenses due to two homes, less favorable tax treatment, etc...

2) Odds of infidelity go up.

Making a lot of money generally requires working long hours and, often, a lot of travel, which can put a huge strain on a marriage and increase opportunities for infidelity (both for the person traveling and for the one at home). Also, rich people are more likely to attract those interested in having an affair. Lastly, wealth equals power, which some people exploit for sexual advantage.

3) When a couple is scraping and hustling to make ends meet, it's a bonding experience.

When you're both young and working to support yourselves (and, eventually, a family), it can be stressful but also joyful and unifying. You're both in the same boat, leading similar, parallel lives.

4) It can change the power dynamic in the marriage.

When both of you are earning roughly the same amount, there's symmetry and equality. If that shifts, it can lead the high-earner – even if subconsciously – to feel a sense of superiority, lose respect for the spouse, and/or expect him or her to do more of the housework/childcare – in short, a recipe for marital strife.

5) If one person makes enough money that their spouse can stop working, it can eventually lead to deep unhappiness for the nonworking spouse.

I'll acknowledge up front that this is a high-class problem that pretty much only affects one-percenters – but that's my world...

6) Deciding how to spend (or not spend) the newfound wealth can lead to conflict.

One friend told me that when he hit it big, he couldn't wait to spend his fortune and enjoy the luxuries of life. For example, he wanted to live in a big brownstone in New York City and have a mansion in the Hamptons.

But his wife was super frugal, uncomfortable with their new wealth, and even more uncomfortable displaying it. He ignored her wishes and went ahead with his purchases, which he believes was a major contributor to their divorce a few years later.

7) Becoming very rich can change people for the worse: they can become arrogant and self-absorbed and look down on others.

Just open the newspaper to see examples of rich, narcissistic jerks everywhere, like Tesla CEO Elon Musk or Uber co-founder Travis Kalanick. But were they always this way, or did making a ton of money cause them to become so? My observation of dozens of extremely wealthy people is that it's 25% causation and 75% inflammation.

4) As I mentioned last week, my dad had a transcatheter aortic valve replacement ("TAVR") at Dartmouth hospital on Wednesday. It's a minimally invasive procedure to fix his narrowed heart valve, which doctors discovered after he had a ministroke in August. Hopefully this will cure the chronic weakness and occasional dizziness he has been experiencing.

The procedure went well, but unfortunately, there were complications... The aortic valve sits immediately adjacent to the electrical conduction system that regulates the heartbeat – and in about 10% of cases, the TAVR procedure messes up that system. That's what happened to my dad. The upper and lower sections of his heart, which are normally in sync, were beating irregularly. This is called an atrioventricular ("AV") block or "heart block."

Sometimes, the heart goes back to normal on its own, but my dad's didn't. So after monitoring him for a couple of days, on Friday morning, the doctors concluded that he needed a dual-chamber pacemaker.

Alas, they weren't able to squeeze him in that day, so he had to spend the weekend in the hospital. While he felt fine, his heart rate slowed alarmingly from 75 beats per minute on Friday to 45 on Saturday and to 35 on Sunday. So the doctors moved him to the intensive care unit and implanted a temporary pacemaker to stabilize him until yesterday, when they installed the permanent one.

Everything went smoothly, and he should be discharged today. He and my mom will be staying at our extended family's house on Lake Sunapee, about 30 minutes from the hospital, for the next month before it'll be safe for them to go home to Kenya.

Here's a picture of him after the two-hour procedure, when he was finally allowed to eat – for the first time in 21 hours! He happily devoured the pizza and donuts I brought him:

Hint: If you or a loved one is ever in the hospital, bring lots of donuts in the morning and pizzas at night for the hardworking doctors and nurses. It's a nice gesture of appreciation – and my dad got the best care ever!

Tomorrow, I'll take a look at Medtronic (MDT), the company that made my dad's pacemaker. Stay tuned!

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.