Concentration of power & wealth: Do tech CEOs have more authority, influence than elected officials?

Well, for more on this story, then we're going to speak now to Gavin Bade, trade and economic policy reporter at The Wall Street Journal. Gavin, thank you very much for joining us today. So again, we're just getting news then of Huang's resignation. I'll start by asking you then, I mean, is it significant that he stepped down rather than being fired? I think it's significant. I think it's NVIDIA trying to get a hold of this story a little bit and arrest what's been a pretty quick drop in its stock price here. We see a little bit of a bump in pre-market trading here and just trying to kind of shut down what's been a scandal that's really shook the entire tech industry and Washington, D.C. I don't think this is the last person either in Washington or NVIDIA that we'll see lose their jobs out of this. Now, the company, at least for now, Gavin, has named Colette Kress as interim chief executive. She's, of course, the current executive vice president and chief financial officer. Can you tell us more about her and perhaps about the likelihood that she stays on? If you don't think it'll be her, who else could succeed Jensen Wong? Well, NVIDIA has been pretty notorious in the tech industry for not doing much succession planning. And Jensen Huang has kind of kept it that way. He's kept a very tight control on this company. So I think people have been saying maybe his daughter may succeed him. I think we will see this interim CEO go through some pretty rough waters in the next few weeks. So I'm not sure who's going to come in and succeed Jensen in the long term. But for now, They're just gonna try to get a handle on this situation. And going forward, I think there's any number of candidates that could arise. Any number of candidates that could arise. But this kind of reminds me of Steve Jobs' death when he was heading Apple. There were fears that Apple really couldn't survive his passing. Similar question then. Can NVIDIA exist as successful as a company as it has been without its founder and, you know, the symbolic face of this company, Jensen Huang? That is certainly the hope from everyone in financial markets and in Washington, right? It's hard to overstate how critical NVIDIA as a company is to the U.S. economy and the AI boom in general, right? This is one of the biggest companies in the world. It's like 5% or was 5% of the S&P 500 index. This is a company that most Americans have shares in, in their 401ks, their retirement accounts, right? And so it's also at the center of all of this circular financing in the tech industry. So If this company goes south, if this company, you know, really goes through some hard times, you could see reverberations across the entire US and global economy. So it may be just too big to fail. Now the paper you work for, Gavin, the Wall Street Journal, reported six months ago on Wang's potential ties to the suspected Chinese spy Alice Wong. They reported on the so-called Culper report. Now, one of its major revelations is that over 20... 20% of NVIDIA's 2026 compute revenues were driven by China, and this was supported by both illegal GPU diversion and Asian intermediaries as well. Can you tell us more about the consequences of these revelations if they are later to be confirmed? Yeah, absolutely. This could be a, this is a very big moment for US-China policy, right? NVIDIA has been pushing the Trump administration very hard to allow it to sell some of its chips into China. Now, they have seemed to be going around some of the export restrictions. That's what's coming out now is that they were shipping through other countries, maybe through Megaspeed and things like that. But he's also been in Trump's inner circle since the beginning of his second term, right? He was on Trump's trip to China. He's been in the Oval Office multiple times. He's buddy-buddy with Commerce Secretary Howard Lutnick. And at every turn here, was pushing the U.S. to do less to restrict chip sales to China. So I think as this scandal unfolds here, you'll probably see the U.S. take a harder line on some of these export restrictions to China and probably try to, you know, pull back on some of this. I think it remains to be seen how hard the U.S. goes on that. I think there's still going to be recriminations inside the Trump administration. But the impact of the scandal on China policy in Washington, I think, I think it's hard to overstate. There's so much to say about how this relates to China policy, Gavin. I mean, I want to ask you, the reporting about this potential affair and Alice Huang potentially being a spy has been out there for a while. We do know as well that Donald Trump was potentially made aware of these allegations several months ago, if not more. Why do you think he didn't do anything about it? We also know, again, as a follow-up, that, you know, Huang gave a lot of money to Donald Trump's ballroom fund. Do conflicts of interest potentially explain why it took him so long to react? Potentially, absolutely. That is the million dollar question here in Washington, perhaps a trillion dollar question with the size of this company is why did Trump Keep it, keep Jensen Wong so close to him and keep him, you know, within his inner circle when there were clear indications that there was some sort of espionage going on here. We know that Marco Rubio wrote a memo last year and this was circulated around. Trump was warned about this. Jensen was still in his inner circle. He still went to China. It seems that the Commerce Department has been kind of slow walking some of these investigations into how the Jensen and his His company were trying to get chips into China through intermediaries. So that is something we're trying to find out is why, in fact, did Trump keep him so close when there were issues of espionage? And this all comes in the context of kind of a detente between the US and China on trade policy, right? We saw last year tariffs get to very, very high levels, almost an embargo between the two countries. And since then, things have really thawed out. We've brought down our tariffs. They've relaxed some of their export restrictions. And we've seen a little bit more of a friendly attitude. So is Jensen's attitude, is his influence a part of that? That's something we're still trying to peel back the layers of here in Washington. Now, speaking to the potential gravity of these consequences for the U.S. economy, Gavin, I'll add that we're just getting news from the media outlet, the information that Alice Wong's company is allegedly invested in DeepSeek and even promised NVIDIA chips. So, I mean, again, given the scale of these revelations, is there any other way to spin this other than Donald Trump being quite indifferent to Washington's national security and economic interests? Yeah, I think that the context here is that there's been a long-running rivalry between what you could say are the China hawks, the people who are hard on China in the Trump administration, and people who want a more conciliatory attitude. And I think this is just kind of the flashpoint for that ongoing struggle here. Trump himself He likes a CEO. He likes a very powerful person. And he's been willing to kind of push some of these concerns about espionage or things aside, kind of like, well, how could I have a conflict of interest? I'm the president. I'm Trump, right? I think we just don't know exactly what was going through his head. Did he just dismiss out of hand these allegations of spying and espionage? Was he concerned about them? Did he think that he was playing Jensen as a double agent? We just I just don't know exactly. Exactly why he was kept so close to Trump in these last few months. But it does seem to go pretty deep in the administration. I think the recriminations will be long lasting here. As a final two-part question for you, Gavin, there have been fears that the AI industry is a bubble, that it could pop soon. Do you subscribe to that projection? And if so, how instrumental do you think this NVIDIA case will be in potentially leading to a wider catastrophe in the industry? And then the second part of that, I mean, what kind of lessons should be or can be learned from being in a situation where so much of a single industry, if not much of the The U.S. economy essentially depends on a single A single company and so much in a single person. Right. So I think this is what's interesting is we've had a couple of flashpoints that show us the the risks of concentration of Power and wealth in the U.S. economy, right? Like so much of the U.S. economy being built on NVIDIA and NVIDIA chips and reliant on it, not just the company itself, but all of the hyperscalers, all of the AI companies are using these chips. A lot of them have entered into very interesting and circular funding agreements with NVIDIA where they take on debt to buy NVIDIA's chips so then they can pay NVIDIA back. A lot of risk for systemic consequences here, right? And then we also see the figure of Jensen being kind of this enigmatic CEO where he makes all of the calls. And if he exits, no one really knows what to do, right? He's got so much control in himself over the US economy. That's a risk in Right. It reminds me of a few weeks ago when Elon Musk. Or someone in the White House, whoever, turned off the Starlink or turned down its intensity over Ukraine and allowed Russia to attack Ukraine, right? The question was asked in Washington, who actually has control over our national security apparatus? Is it this tech billionaire? Or is it the US government? Who actually has control over the US economy in this instance? Is it, you know, NVIDIA and the singular CEO? So I think there's going to be, especially with Democrats coming into Congress here, some talk and some recriminations around the concentration of power in this economy. And do these CEOs actually have more authority and more influence than our elected officials? I think that's something that lawmakers are going to focus on moving forward here. We'll see if they are indeed up to that very heavy task. Gavin Bade, a pleasure to hear your expertise, trade and economic policy reporter at The Wall Street Journal. Thank you very much.