Jensen Huang’s resignation from NVIDIA has triggered widespread scrutiny over the company’s business model, supply chain practices, and international relationships.
NVIDIA’s immense valuation—often placing it among the world's most valuable companies—is rooted in its design and sale of advanced graphics processing units (GPUs), which are essential for training and running large-scale AI models such as ChatGPT and Claude. Without these chips, modern AI systems cannot function.
Corporate Web and Strategic Alliances
The Guardian reports that Huang played a central role in shaping global AI strategies through direct engagements with leaders including Mohammed bin Salman, Keir Starmer, and Emmanuel Macron. These meetings were framed by media outlets as persuasive efforts to promote 'sovereign AI' initiatives, with Nvidia positioning itself as an indispensable partner.
NVIDIA has since announced arrangements—such as supplying 260,000 advanced GPUs to South Korea—but details on delivery timelines, pricing terms, or payment mechanisms remain unclear. The agreements are not publicly disclosed, raising concerns about transparency and accountability.
Neoclouds and Financial Structures
To mitigate risks associated with building data centers and securing customers, NVIDIA financed a network of companies known as ‘neoclouds.’ These entities purchase NVIDIA chips and lease them to major tech firms such as Microsoft, Meta, and Google. This structure helps maintain demand while reducing exposure for the parent company.
NVIDIA has also invested hundreds of billions of dollars in AI startups—many of which may become future clients—and provided substantial financial support to organizations like OpenAI. The flow of capital through these arrangements is extensive but largely unaccounted for in public disclosures.
Geopolitical Dependencies
The production of AI chips relies heavily on Taiwan Semiconductor Manufacturing Company (TSMC), which manufactures over 90% of global AI chips using ultra-precise lithography processes operating at nanometer scales. TSMC’s manufacturing capacity remains unmatched, with a reported yield rate of only 60% for its most advanced products—a defect rate that represents significant technical and economic challenges.
NVIDIA has maintained long-standing relationships with TSMC dating back to the early 1990s. According to industry lore, Huang wrote a letter in 1997 introducing himself to then-TSMC CEO, establishing what analysts describe as high-trust partnerships built over decades.
Controversial Access and Alleged Misconduct
Megaspeed, a Singapore-based company, gained access to large volumes of NVIDIA GPUs despite other firms facing supply shortages. Investigations revealed that Alice Huang—CEO’s sister and one of Megaspeed's executives—had an affair with Jensen Huang and was later accused of being a Chinese intelligence operative.
The relationship allegedly facilitated the smuggling of approximately $7.5 billion worth of NVIDIA chips into China—an action that raises serious questions about compliance, national security, and corporate ethics. The full implications remain under investigation by authorities in both Singapore and China.
Uncertainties Ahead
NVIDIA’s operations are deeply entwined through complex financial structures, circular investments, and confidential agreements. While there is public acknowledgment of long queues for GPU access, details on customer priority lists or actual shipments remain unverified.
No official audit has been conducted to assess the integrity of these supply chains or contractual obligations. As a result, many aspects—such as who holds access rights, how decisions are made, and what safeguards exist—are still opaque.
The departure of Jensen Huang may not immediately destabilize NVIDIA's business model—but it does expose critical vulnerabilities in its governance, transparency, and international credibility. Whether future leadership can restore clarity remains uncertain.