This is just a general observation. When I first started following the NVIDIA scandal, I had the sense that Jensen Huang was either duped by these cut-out companies sending NVIDIA chips (physically or virtually) to China, or perhaps he was beguiled by Alice Huang, the suspected Chinese spy. But it’s very hard to square that basic take with the various reports we’re seeing.
Huang was a very hands-on CEO. But the kinds of transactions we’re talking about require lots of people to be involved. There are multiple examples of what seems like NVIDIA taking affirmative steps to conceal what it was doing. And a decent amount of this seems to have been an open secret. A short seller (Culper Research) published a report all the way back in May that set forth the broad outlines of Huang’s relationship with Alice Huang and the mammoth amount of NVIDIA production that was going to China through these cuts-out and backchannels. There are a lot of boutique investment research products out there. But a lot of this, or a lot of smoke about this, has been out there for months. It kind of seems like all the key players knew just what they were doing, who they were helping. You can even see a bit of this in the sharks swirling around Howard Lutnick. Bessent isn’t saying “I can’t believe you were doing this.” It’s more like, “we’ve been telling you not to do this all along and you wouldn’t listen.” I’m not clear what all this amounts to. But the evidence is running significantly ahead of what seemed like the original storyline.
