Why Silicon Valley’s defense of Jensen Huang shows how the Nvidia scandal grew

WIRED reports that inside Nvidia and across Silicon Valley, many people never believed the company’s founder would lose his job, and some still don’t accept that he should have. Current and former employees described carrying on with business as usual while trusting the board. Prominent investors defended him on X even as more reports of alleged relationships surfaced. He resigned after admitting an affair with Alice Huang, an executive at Nvidia customer Megaspeed whom U.S. officials suspect of being an asset of China’s Ministry of State Security; the New York Times and Reuters then reported further relationships with Nvidia employees (our resignation coverage).

Nvidia’s roughly 60,000 employees reportedly have one of tech’s lowest turnover rates. The founder spent 33 years building the company, keeping layoffs rare and red tape light, and staff talk about having “green in your blood.” That culture helped Nvidia build the hardware the AI boom runs on. It is a real achievement.

The defenses WIRED collected are telling, though. Investor Antonio Gracias wrote that one mistake doesn’t erase a lifetime of leadership. Sarah Guo argued a founder with 30 years of capable leadership had earned the presumption he should keep leading, a few hours before Reuters reported another relationship with an employee (coverage). Industry executives told WIRED his biggest mistake, besides the relationship itself, was admitting the affair in writing. That treats candor as the error.

The idea that a founder is irreplaceable and should be judged by a different standard is one reason problems linger. WIRED notes that some corners of Nvidia had already been whispering about the relationship with Alice Huang, and one venture capitalist put the odds of his departure below 10 percent on Monday. When everyone assumes the storm will pass, nobody acts early. Our timeline shows warnings about Nvidia’s chip customers building for more than a year.

To be fair to the defenders: no authority, and not Nvidia’s board, has formally accused him of wrongdoing in his dealings with Alice Huang. China denies she is a spy, and the board says it doesn’t believe secrets were compromised. It hired Wachtell Lipton to investigate, and the FBI is looking into it, according to the president. Due process matters. But resigning over policy-violating relationships with staff isn’t a witch hunt; it is what governance is supposed to look like.

One AI company chief told WIRED that Nvidia’s habit of bankrolling startups helped prop up chip demand, and that a professional CEO might stop. If so, it shows how much of the AI trade leaned on one company’s balance sheet and one person’s choices, a concentration the market began pricing when the shares fell (stock coverage). Nvidia shares recently hit their lowest point in more than a year, and the company reports earnings next week. That key-person risk is the part worth talking about. More in our NVIDIA coverage.