This will go down as the greatest leak or breach in espionage history.
Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher and I'm wearing a leather jacket.
Yeah. No, that it looks better on you. Um, by the way,
Looks better on all lesbians. Just
I think sales of leather jackets are going to plummet.
Plummet just for lesbians. Can you believe this, Kara?
Let's just get into it. Yes, I can. Absolutely. We have to get right to breaking news. Nvidia CEO Jensen Huang has resigned following revelations of two extramarital affairs, including one with a woman US intelligence suspects of spying for China. The board has named Nvidia CFO Colette Kress interim CEO and will consider both internal and external candidates for a permanent replacement. Huang's departure comes after reports of a second affair with another direct report, Kimberly Powell, a senior Nvidia executive who runs its healthcare business. Nvidia shares are down 7% at the time of the taping as the company faces leadership transition without a clear succession plan. I mean, Scott, like last week when it happened, I thought he would get dumped, but of course Silicon Valley tried to put up a fight here. Give your topline thoughts and then I shall.
This isn't about infidelity. This is about national security and that's why this is going to get so much worse. And I bet that our security apparatus began interviewing the board members. And the questions got so serious so fast that the board members probably lawyered up for their own concerns and their lawyers probably told them, "You need to fire this guy right away." Because any director that is privy to this type of information and what has gone down here, you want to distance yourself and show that you take this somewhat seriously. And just let me give you a quick sense of what these chips power and what potentially was compromised here from what seems like
Other than showing up and saying hello, you know, I am a spy and I am here to glean sensitive information.
These are some of the things that Nvidia's class computing enables. Nuclear weapons, simulating nuclear detonations, modeling weapons aging, validating stockpile reliability without physical testing, autonomous weapons, AI-driven drones, target recognition, autonomous navigation, simulating aerodynamics, extreme temperatures,
Flight behavior and advanced guidance systems, intelligence and surveillance, satellite image analysis, facial recognition, tracking individuals and military movements at enormous scale, cyber warfare, missile defense, biological and chemical threats, military command and control, combining satellite, radar, intelligence, and battlefield data to accelerate military decision-making.
Is that all? I mean, come on. I do want to get into Silicon Valley's reaction because it literally has been soulless and without any interest in this country. It's I think when you use that word traitorous, I'm kind of there with a lot of these ideas. Okay. But reckless, but I mean what it looks like is this guy had the mother of all bad judgment. Is that
Traitorous? I don't mean him. I mean the reaction. I'm talking about the reaction.
Um, no, I think he didn't know. And that's another issue. Trump knew about it. There was a big fight among and between cabinet officials. Rubio and Bessent were on one side saying this is serious. And Howard Lutnick, also known as Lutnik, and David Sacks, his Trump's alleged AI guru, were on the Chinese side of this equation and were pushing Jensen's efforts to get more chips to sell to China. That's what he was doing. You know, essentially that was his push and a lot of people in the national security apparatus were very disturbed by his influence on President Trump who of course knew about what was going on and what they didn't do as Hillary Clinton pointed out in our other podcast is tell him like they needed to tell him completely. So first take on this, this national security issue is very clear. What let's talk about a couple things. The reaction, this fight between and among Trump people and what Trump didn't do here which was to warn Huang what was going on. Him saying he didn't know is a real problem. The government should have told him that this woman was under surveillance. They didn't know about the second woman. But they absolutely had a duty to warn this guy of what he was in. And who knows how long and how many secrets went through. Who knows? Nobody's ever going to find out. I think
They sent officials down and they found unopened boxes of GPUs implying that they were just at a distribution center. Weren't even going to be used there. The question is where were they going to go? And you can bet in these hearings that the Democrats are now going to control. They're going to bring up the fact that, okay, did the Trump administration know, purposely know they were throttling back defense systems for Ukraine? How early did they know we were potentially losing or had information compromised to the CCP? I mean, this is literally playing out like the president is an asset of the CCP and the GRU.
Yes. Yes, indeed. And to not stop this. It wasn't telling Jensen, it was intervening and stopping. And for a moment, I thought, well, maybe this is so serious. And there's so many outstanding people in our security apparatus, distinct from Trump. I thought for a moment maybe they turn, maybe they sat Jensen down and turned him and started feeding him, you know, false information to take them off one way or another. But it doesn't look like that happened. No, there was a real fight last week in the cabinet. There was an enormous fight. They kept trying. Rubio and Bessent apparently kept trying to stop this and stop the company.
They're all going to go on background saying I was freaked out by this.
It seems like they were because Rubio wrote a memo, had a memo distributed just I mean obviously cover your ass of course. Um, what's also astonishing is the kind of influence on Trump. I you know as much as you want to focus on Jensen Huang, he didn't know or he should have known. He should have known. That's like
Okay. I don't know. It's daylight and yet I'm sitting outside getting burnt. I mean,
This was like because I'm so attractive in my leather jacket, but I know people are making light of it, but it was he did it on purpose in that regard. One of the things that's really I want to talk about two things. What's going to happen next with Nvidia and the AI boom. But first, I will note Huang does have job security somewhere. Elon Musk says he would hire him responding to an idea on X with that would be an honor. And then our least favorite minion of Elon's minion, and I mean that as tiny and tinier, said release the summary to shareholders. This is Jason Calacanis. Let them vote their shares. The board is obviously going to be in CYA mode, not shareholder mode. In a case like this, they will make the wrong decision. I'll bet 90% of shareholders would want Jensen to stay. What an attitude about national security that money trumps national security. It's really and they're not in their CYA mode. They're in their this is wrong mode. Just this reaction from Silicon Valley which has been consistent except for very few people that who cares you know he's making money for everybody is really a sickness at the heart of why we should not trust these tech people trying to come back you know into the fold.
The term we use over and over and it's in full force here is idolatry of innovators and idolatry of the dollar. So an unbelievable innovator has created $5 trillion in shareholder value, but that exonerates him from compromising national security. We have millions of active service members. We have millions of people who've died for this country. We have an unbelievable security apparatus. We have IP that is unrivaled such that we can have peace, prosperity, and defense. And this might go down as the greatest compromise or
I mean this is right up there. I forget the guy. The US Navy used to be able to literally tell you, okay, the Russian sub patrolling here is about to turn left in 17 seconds. And then a spy within one of the agencies revealed that we were doing that to the Russians. And that was a huge blow to our Navy's ability to track Russian submarines. That this makes that the potential damage here is so extraordinary. This will go down as the greatest leak or breach in espionage history.
Why do you think they have this attitude like who cares? Like oh my, you know, from all of them like it's really disturbing. Shawn Maguire, Bill Aman, they literally have no soul. No American soul. Like this is like so what? It's the so what. And just so people know, just this week, Alex Karp from Palantir suddenly said he was progressive. Do not believe these people. They do not care about anything but their shareholder value and their own power. I have said this over and over and over again, and this is a glaring example of it. It's again, oh, $5 trillion, you can commit one of the greatest breaches in history that puts our nation at risk, but oh baby, you've created $5 trillion in wealth. No problem. Then you're exonerated. And on the other side, where we're also saying the idolatry of innovators, is this notion that we always fall into, and it's a false notion that one of these figures is a Jesus-like figure that because they built an amazing company because they're smart, it's all about them. Apple was not going to survive without Steve Jobs. Oh my god, what is Microsoft going to do now that Bill Gates is gone? Oh, Eric, Sergey, and Larry, that is the secret sauce of the company. Oh my gosh, you know, what are we going to do?
Lee Iacocca, it goes back.
And here's the thing. At Nvidia, there are 50 potential CEOs in that company. You can't build a $5 trillion company without the deep. That's like having the best quarterback in the world, but if you don't have a good line and receivers, you're just going to have a guy get beat up and sacked all the time. To believe that he somehow is the lynchpin to Nvidia and AI in general is again to this notion that one of these figures are Jesus-like
And don't deserve the same scrutiny as normal humans and also that they have some you know all these guys they're impressive people but they put their pants on one leg at a time
And their key skill to get to this level and credit to Jensen
Is that they have dozens of extraordinary people around them. Yeah, that's the one thing. You know, many years ago before he died, Steve Jobs actually addressed this with me where he said you know he was talking about post-him Apple and when he was sick and he said what do you think I'm Willy Wonka and they're the helpers here, the Oompa Loompas. He said this is a company full of talented people. He himself the one man that everyone did worry about what would happen. If you recall at the time when he died people were like how Apple is done, which was very typical of people there, but it wasn't. He knew it himself that he had this group of executives who has 10xed that company's value. Whatever you think of Apple, it's bigger and better than ever before.
Look what's happened to Alphabet. Look what's happened to Microsoft.
Yes. Exactly. And one of the things that they love to do is this like they just think they're going to die. Like I don't know what else to say. There's a line in Moonstruck that Olympia Dukakis says to her cheating husband, "No matter what you do, you're going to die." Cosmo, they think they're irreplaceable and they also take any opportunity. Like Elon, of course, is like, "I'll hire him." Let me tell you, Jensen Huang, please do not do this. It would sully an already sullied situation. This is a time to reflect.
Oh, work for Elon. Work with Elon.
He is going to be in a bunker with lawyers. Should be
And in Langley, Virginia answering very uncomfortable questions for a long time.
I get that, but he also has to be with his family. Like this is a huge betrayal of his family if even if they knew it like it does and his employees. It's a huge betrayal of not just that because his employees he owes a debt of gratitude to them. He should be thinking about what he's done and spending a lot of time doing it.
I think that's all small ball compared to one thing. If you were to have Wonder Woman's golden lasso of truth and wrap it around every Fortune 1000 CEO who is stressed out, is hugely successful, falls into the trap of believing they're more interesting than they are, maybe didn't get a lot of quote unquote play when they were younger, and all of a sudden they're the sexiest man in every room they walk into. I bet a lot of them have had indiscretions.
Pretty much all of them. And I know all that. I would bet I would argue that out of the 10,000 Fortune 1000 CEOs globally, nobody has compromised national security like this man right now. This other stuff makes for good tabloid headlines. It's embarrassing. This is about did in a matter of months did we close the delta between our most advanced weapon systems and the CCP's? That is what this is about.
Which is what many in even in this administration were concerned about. One of the things that Hillary pointed out is that Trump probably didn't tell him because he doesn't believe the national security apparatus. He distrusts them. If it doesn't go and everything is hanging on the AI economy booming, so talk about you know is Jensen Huang so important to the AI boom that his personal scandal could shake the broader market? It's going to shake it for a moment, but talk a little bit about that. What happens because he was at the center as we've talked about over and over the danger of these interlocking deals. It feels Ponzi-like. It feels some not Ponzi. It's more of a circle jerk. But talk about that because if he's the lynchpin then they were screwed in the first place as far as I can tell. It's not a real industry in some fashion.
Well, I would push back on that. I do think it is a transformative technology. There's going to be a ton of shareholder value, a lot of ups and downs. Nvidia is an unbelievable company. It arguably has the biggest moat of all of them. But is this guy the lynchpin? He's not the lynchpin right now. He just took a dump in the punch bowl, the AI punch bowl, you know, the size of the Titanic. And all of a sudden, for example, probably our security apparatus is asking Anthropic what kind, you know, who is and by the way, in the midst of trying to create a book for their IPO, asking them, all right, we need to know every relationship every senior level person here has had. All of a sudden, I mean, again, we made this analogy last week. This is Department of Defense, Department of Energy, nuclear weapons like sensitivity, sensitive information with we work like security. When you become a case officer of the CIA, on day one, they say literally on day one, if you're on the road, you're stressed out, you go into the bar, and someone attractive expresses interest in you, it's a spy.
Yeah. Or you didn't get any more attractive going. That's like the first thing they tell you. And for
And for him not to recognize this. But again, it goes back to the idolatry of. I was asked to go on a package from Morning Joe this morning and I couldn't get the timing right because I'm on the West Coast. But the two very basic predictions I have are the following. And they all fall under this notion the idolatry of innovators. We're acting. They're trying to downplay this because everyone's like, he's above the law or above scrutiny or above norms because he created so much shareholder value. But also, I believe Nvidia stock is probably going to be higher than it is now because this notion that all of AI and Nvidia rests on his expertise is just insane. And Ms. Huang, Alice Huang, she if you when the stock in after-hours trading last night, Nvidia was down 8%. That's approximately $350 billion. You could argue Ms. Huang's affair cost Nvidia shareholders the value of Bank of America. That's what it was down in after-hours shares last night. And if you want to think about potential lawsuits, what if Binance can connect the hack or the misdirection of Nvidia chips to bad actors connected to North Korea and North Korea's hack of Binance that cost them $6 billion? What if that was executed using Nvidia chips that potentially were compromised?
Yeah. No, this goes lawsuits, congressional scrutiny. So many people are going to start connecting really bad things that may have happened not intentionally, not because of malice, because of Jensen, but because of negligence. Every and I'm convinced the board. So a couple days ago, the board announced an independent counsel. I can tell you what an independent counsel's findings are going to be based on one thing. Who's paying for it? Remember the independent counsel for Governor Christie on what happened with that whole traffic scandal? All right. The governor's office paid for it and what do you think? They came back and said when he found out he wept a tear and he didn't do anything wrong. That independent counsel was going to come back and say mistakes were made but Jensen can still be the CEO. Lawyers sat down with the board and said, "Oh my gosh, girlfriends, you're going to get infected by this. This is national people. This is very, very serious shit." And they all freaked out and immediately said, "Uh, you're out." But this notion again that the entire sector, the Anthropic IPO coming up, is actually more important to the AI sector than one guy's resignation.
There's two things that I think are critical to point out. The first one is something Hillary pointed out is that Trump is seeing Xi. But one of the things she's predicted is that he will go to this thing. He'll ask Xi what if this is true. She will say no no. Trump will go see. They've already denied it. He wasn't. But Trump himself like he did with Putin. Putin says he didn't do it. So I believe him that he's going to believe her over our national security apparatus. That's one. The second thing is that everybody in Silicon Valley who has Chinese national ties is going to be and there's a lot by the way are going to be scrutinized very. It may be unfair but not just Chinese. They should be looking at all of them but the kind of spying going on in Silicon Valley has got to be vast. Everyone's going to get scrutinized now. And there are several. I have already heard chatter about various sundry tech people who have links with China in ways that are disturbing. They're going to have to be looked into. It's not fair. It's probably not fair in some ways to target certainly to target Chinese Americans, but this is going to be one of those things where everybody's relationships across the world and not just China are going to be scrutinized with foreign nationals. And that's a, you know, and I think it's time for me to admit my wife is a Chinese spy. She told me to tell everybody that. Just like Amanda was like, I'm a Chinese spy. Don't you know that? Why would I deceive you?
But let's just go through some of the scenarios here. You just said Jensen was constantly advocating for the sale of the most sensitive chips to China
As much as possible and more and more.
And we thought at the time, all right, that makes sense. He just wants to sell more and get the stock up. But what if the following happened and we'll never know. But what if imagine this phone call to Jensen. Jensen, oh my love, it's Alice. I'm so upset. What's wrong, Alice? I just got contacted by the CCP and they have told me they're going to unmask our affair in the worst possible way unless you continue to sell chips into China. And if they see you advocating for it, maybe this won't come out. How do we know he wasn't unmasked and compromised six months ago?
Yeah, we don't know. And the thing is, we'll never know.
And that's what happens in honeypots. People think honeypot is like in the middle of sex, they go, "Give me the design for the latest GPU hopper." No, the honeypot is meant to gather information and then compromise the person and say, "Wouldn't it be better if this didn't come out and it won't as long as you do the following simple things for us?" How do we know Jensen Huang wasn't compromised a year ago?
We don't know. That's the whole thing. This thing has got to be undone. And let me say to everyone in Silicon Valley, you've got to stop. You people have got to stop. If you
