Impact of Jensen Huang's departure from Nvidia

To examine this breaking news and what it means to the tech world, we are joined by San Jose State Professor and tech expert, Ahmed Benafa. Ahmed, good morning to you. Thanks for joining us again. Good talking to you, Andre. All right, so, Jensen, I want to get down to something Jesse just said a moment ago. Alice Wong, she is a former executive at Megaspeed, and NVIDIA apparently is a customer, they were a customer of NVIDIA. They shipped these chips that were not supposed to go to China to this company set up outside of China and then shipped into China, even though they're not supposed to have these particular high-end chips, right? That is correct. And the number is really staggering. We're talking about, you know, $4.5 billion in one time for the mega speed. At the same time, there's another company that took about two. Billion dollars of chips, and both of them are in Singapore, and both of them are just shell companies, basically offices, and they don't have history. And the problem now, what happened to the chips after that? And it was very clear that this is a back channel to send the chips to China. They channeled about 240,000 chips. OK, Ahmed, here's the thing. I'm hearing reporting, I'm seeing reporting that it's not a secret that companies do this. They set up these shell companies. To skirt the law, to skirt the law that prohibits these advanced ships from ending up in China. And so this has been going on for years. What have you heard about this? Well, there's some investigation from the Commerce Department about it. There is some question about this kind of the, you know, of deals, checking the background. The issue here, Andre, is not just the chips. The issue is, as you said, it's been going on for a while. It's the relationship with this lady, the Chinese spy, you know, that the... The intelligence agency, they said she is a Chinese spy. Now, what kind of information did she, you know, get from from Jensen Huang? Is it information about the contracts with the government? Is it information about future products, information from his phone? All these kind of things are really the scary part. This is a national security problem more than just breaking the law by, you know, sending the chips to China. There is also the influence part of this whole thing. Could she have influenced Jensen Huang, who has a close relationship with President Trump? And Jensen Huang has been a proponent of letting China have some of these advanced chips that this company makes. So that is also being looked into. True. That's true. Because we have seen him, you know, defending that and say that we have to open the market. We have to give them something they don't have to make their own. You know, you look at it from one side, they say, well, he's a businessman. He's trying to keep the market open. But at the same time, you you connect the dots and you say, OK, why not? I mean, she will be pushing him, pressuring him so he can keep that channel open and keeps, you know, you know, giving conveying this message to the White House. And, we're in this race over AI with China right now. They have, if estimates are correct, hundreds of thousands of these more advanced chips that only the U.S. makes, that only NVIDIA makes. What does that mean for China? Can they copy these chips and do something similar? Or what can these chips be used to do to help China? It's going to help them with whatever, you know, models they have or the AI programs they have. But copying it is not easy because the design is in Santa Clara. The manufacturing is in Taiwan. But the equipment used to build those chips is coming from Netherlands. So Netherlands is not giving those devices or those machines to China. And the same thing with Taiwan. They're not going to give them the chips. So. They still have control on that ecosystem. Now they can use this wave of chips until NVIDIA come up with the new chips that are faster, better, and then that's going to be the next part. It's it. Copying it is not easy. If that was easy, they would have done that a long time ago. But does this give them an advantage? Yes, they have these chips, but does this give them a competitive advantage to meet what the U.S. is producing here, the advancedness of these systems? At this point, they can use it to run those models. I mean, the fear, Andre, is using those chips as part of their military force. That's the biggest fear. Now, nobody would like to have that happening. So it's going to give them, you know, they're going to sell them some time. They're going to save them some time. But to get to the point where we have advanced chips, now they're going to start looking for those advantages. You know, one good thing coming from all this, You know, drama we're going through is now we understand that how serious is China about getting their hands on the chips and the technology. Yeah, we can see it. We knew they were serious, but now, you know, we can see how serious it is because of all what is playing out. I mean, the most valuable company right in our own backyard. And we're dealing with all this. Professor Ahmed Banafa of San Jose State, thank you so much for joining us and providing your insight. This is a story that just continues to develop day to day. We appreciate your time. Thank you, Andre.