Ousted CEO Huang Faces Intense Questioning and Possible Legal Jeopardy Over Transfer of Nvidia’s AI Secrets to China

The founder and former CEO of what had been America’s biggest company in market value may have gotten ahead of one investigation with his forced resignation from Nvidia, but his possible legal troubles are just beginning.The board of Nvidia had been about to investigate the role of Jensen Huang, one of the world’s richest multi-billionaires, over his affair with an alleged Chinese spy before he stepped down on Thursday without issuing a statement beyond his earlier admission of having had the affair.The threat to his job ended with the disappearance of Mr. Huang’s image, title and background on the Nvidia website; now he faces congressional and possible legal probes into how and why some of the company’s most advanced semiconductors wound up in Communist China.Those included certain ultra-advanced AI semiconductors that China wanted for military weapons and systems, among other purposes, but were barred from legal export to China by the Commerce Department’s Bureau of Industry and Security.The FBI suspects that some of those transfers were facilitated through an obscure Singapore company, Megaspeed, by Mr. Huang’s paramour, Alice Huang, with whom he was photographed at a Taipei bar after a trade show two years ago.But did Mr. Huang have an idea, an inkling, of what his lady friend was up to? That’s the kind of question that Mr. Huang will be fending off, possibly with the fifth amendment, when or if he appears before any of three congressional committees whose members are eager to pummel him with tough questions.No one, of course, will get a shot at Ms. Huang, a Chinese citizen, no relation to Mr. Huang. She vanished well before the scandal broke, is now legally barred by Singapore authorities from returning, and is believed to be at Beijing.A noted law librarian, David Badertscher, formerly with the New York State Supreme Court, suggests the severity of the legal offenses that Mr. Huang has to worry about. Most important, he writes in the Criminal Law Library Blog, are “economic espionage and theft of trade secrets.” The Economic Espionage Act, he reminds readers, “addresses certain forms of trade-secret theft, including theft intended to benefit a foreign government.”Next, he lists “foreign intelligence activities.” Federal law, he says, “includes provisions addressing espionage, unauthorized transmission of national defense information, and certain activities undertaken on behalf of foreign governments.”Finally, under the rubric of “corporate compliance and governance, according to Mr. Badertscher, “a company may face regulatory scrutiny concerning internal controls, export screening, recordkeeping, and compliance obligations, even when wrongdoing by its executives has not been established.”Mr. Badertscher is careful to point out that Mr. Huang does not yet face formal charges.“Importantly, the reports examined here do not establish that Jensen Huang committed espionage, knowingly assisted a foreign intelligence service, or unlawfully disclosed protected information,” he writes. Nor, he adds, “does the existence of a congressional inquiry establish criminal liability.”Megaspeed has promised to cooperate fully with the legal and regulatory investigations while the Chinese denounce the whole story as “a smear,” but their protestations of “don’t look at us” only fuel the sense that Beijing was eager for any way to gain access to the secrets of Nvidia’s semiconductors.Nvidia, with a market value above $4 trillion before the roof caved in with doubts and suspicions about the inner secrets that Ms. Huang may have been sweet-talking out of Mr. Huang, is still going ahead with its own investigation.Microsoft and Apple may by now have exceeded Nvidia in value, but Nvidia’s in-house detective work may be more revealing than congressional and FBI probes. Whatever Nvidia gleans, however, won’t be made public at least until congressional testimony comes out and maybe never.Then too, the White House and Commerce Secretary Howard Lutnick, under fire for not having been stringent in blocking approval of Nvidia exports, should be asking their own questions. One mystery focuses on the relationship between Mr. Lutnick and Mr. Huang.Eager to penetrate the huge China market with the latest and greatest in China’s quest for AI dominance, Mr. Huang, in his lust for profits as well as for Ms. Huang, argued hard with Mr. Lutnick for easing up on barriers to sales. Mr. Huang no doubt knows a great deal more than he’s intimated about all of this. As of now, though, he’s described by Fortune as “a broken man heard saying things like ‘whatever’ and ‘I don’t care.’”

Ousted CEO Huang Faces Intense Questioning and Possible Legal Jeopardy Over Transfer of Nvidia’s AI Secrets to China

Ousted CEO Huang Faces Intense Questioning and Possible Legal Jeopardy Over Transfer of Nvidia’s AI Secrets to China

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