Regarding this matter with Old Huang, everyone should not just sit back and watch.🧐

On the surface, it’s an affair and an acknowledgment of wrongdoing, and the board of directors is looking into it. But the more I look, the more I feel that this is not just a private morality issue; the underlying maneuvering is much more exciting than gossip!

First, let’s state the facts:

• Old Huang sent a letter to employees, admitting to infidelity.

• The other party is a former executive from Megaspeed; the US intelligence community suspects she has been recruited by China.

• The board has set up an independent committee and hired external lawyers to investigate.

• Three congressional committees have requested him to report behind closed doors on November 18.

• The board emphasized that there is currently no evidence of a breach of confidentiality.

Let’s take a look: why make such a big deal out of something with no evidence?

In my view, there are several layers to this:

1️⃣ First, destroy the image, then discuss power.

Think about it, where is the best place to apply a private morality issue? It’s the easiest way to make someone fall silent. Old Huang admitted it himself, leaving him with no foothold in negotiations afterwards. One “spy risk” is enough to pin a label on him, and no real evidence is needed.

2️⃣ The real target is the chip policy towards China.

Don’t forget, Old Huang’s biggest demand in the past two years has been to get America to lift restrictions on advanced chip exports to China. He has been lobbying and insisting that “the Chinese market cannot be lost.”

Now, with a label of “possibly being targeted by Chinese intelligence” attached to him, who would dare to listen if he continues to demand the lifting of export restrictions? Everything he says will carry suspicion. This move effectively takes him off the policy negotiation table.

3️⃣ NVIDIA is too big, big enough to cause sleepless nights.

• In October, the market value approached 5.8 trillion dollars.

• It recently fell back below 5 trillion.

• There is no succession plan, nor is there a clear successor.

• The company is entirely at the mercy of Old Huang.

In a company worth 5 trillion, all decisions resting on one person—how can Washington possibly feel secure? I feel this investigation is most likely aimed at altering the governance structure, bringing in more people with political backgrounds into the board to make NVIDIA more compliant.

4️⃣ The timing is also quite interesting.

NVIDIA is set to report its earnings on the 17th, and the market is concerned about an AI bubble. The timing of this revelation could amplify emotional and valuation responses. It makes sense that someone might want to seize the opportunity to exert pressure.

So what will Old Huang do next?

I guess it will probably be these three steps:

• Short-term: Admit fault + cooperate, framing the issue as a private morality problem, firmly keeping it away from national security implications.

• Mid-term: Relinquish some power, bring in independent board members, actively accept scrutiny, and change the CEO position.

• Long-term: The strategy towards China can only become increasingly conservative, with a clearer alignment.

Truth be told, the biggest impact of this situation is not on Old Huang as an individual, but on the structure of the AI industry. The middle ground is becoming narrower, and NVIDIA is being forced to align more with the American camp; on the Chinese side, the path to domestic computing power will only become firmer.

Of course, the investigation results are not yet out, and currently, there is no evidence of a breach of confidentiality. Let’s not treat conspiracy theories as conclusions. But from the perspective of capital and politics, this game is definitely not simple.

For us US stock investors, the NVIDIA earnings report on the 17th and the congressional briefing on the 18th are two key points; be mindful of the risks and manage your positions.

The above is purely personal opinion, DYOR🙏

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