[In-Depth Analysis] Treating the NVIDIA situation as merely a personal scandal involving Jensen Huang is dangerous. The core of this issue is not the affair itself. What matters is the connection between the individual under suspicion of ties to Chinese intelligence agencies, NVIDIA’s CEO, the large-scale procurement of AI equipment linked to that individual, U.S. export controls on semiconductors to China, and what Jensen Huang knew—or should have known—about this process. Notably, this has now moved beyond mere media reports to include an independent investigation by NVIDIA’s board and calls for congressional inquiry. At this stage, even if GPU demand and NVIDIA’s financial performance remain unchanged, the risk premium applied to its stock price could rise significantly. However, one point must be clearly distinguished: Some speculate that the Democratic Party orchestrated this incident to remove NVIDIA from the market—but no evidence has yet emerged to substantiate this claim. In fact, the three individuals who have formally called for a congressional investigation are all Republican committee chairs. This does not mean political risk is negligible. What matters more than who may have initiated the event is whether this incident could erode NVIDIA’s longstanding influence and regulatory standing with the U.S. government and political establishment. At the center of this controversy is the company Megaspeed International. Megaspeed is a Singapore-based AI cloud provider that has offered computing services using NVIDIA GPUs in overseas data centers and has also conducted business with Chinese companies. The central figure under suspicion, Alice Huang, is a former senior executive at this company. While reports suggest U.S. intelligence agencies have identified Alice Huang as linked to Chinese intelligence, the classified evidence underlying this assessment has not been made public. Crucially, timing is key. U.S. authorities’ suspicions did not suddenly emerge after reports of Jensen Huang’s affair. Investigations into related transactions and GPU usage had already been underway since at least late 2024. Thus, it is overly simplistic to frame this as a personal scandal that triggered politically motivated backlash. Rather, personal connections involving the CEO were later layered onto pre-existing concerns over export controls and customer management. Another critical number must be clarified: The reported $4.8 billion does not represent direct GPU sales from NVIDIA to Megaspeed. It reflects the total trade value of servers and AI equipment containing GPUs purchased by entities associated with Megaspeed. This distinction is vital. To assess NVIDIA’s direct legal liability and the actual scale of potential export control violations, it must be determined who sold what equipment to whom, and where it was ultimately deployed. And here lies the true core of this incident: Had Megaspeed simply been a large customer purchasing NVIDIA GPUs, the issue would not have escalated to this level. The problem stems from persistent questions surrounding Megaspeed’s ownership structure, funding sources, actual locations of GPU installations, and ultimate end-users. Megaspeed originated from businesses tied to Chinese gaming and cloud services and expanded its AI computing operations primarily through Singapore and Malaysia. As the U.S. tightened export controls to restrict China’s access to advanced AI semiconductors, suspicions grew that Southeast Asia was being used as a circumvention route by Chinese firms. This is precisely where U.S. authorities have focused their attention. Yet this too must be clearly differentiated: Providing remote computing services to Chinese customers via NVIDIA GPUs installed in overseas data centers is fundamentally different from illegally smuggling controlled GPUs into mainland China. Based on currently available information, it cannot be definitively concluded that Megaspeed illegally exported NVIDIA GPUs to China. But neither does this absolve NVIDIA of responsibility. What I consider most critical is customer due diligence. For a customer purchasing AI equipment worth billions of dollars, NVIDIA cannot simply accept orders and ship products without further scrutiny. Who is the actual owner? Where does the funding originate? Where are the GPUs physically installed? Who ultimately uses the computing power? Is there a risk of circumventing export controls? The extent to which NVIDIA verified these risks is paramount. Particularly noteworthy is that the scale of these transactions grew rapidly—a factor likely to become a central issue in future investigations. Therefore, I will be closely monitoring three key points: First: When did NVIDIA’s internal teams first recognize the risks associated with Megaspeed? If U.S. authorities were already investigating these transactions well before the affair became public, did internal teams at NVIDIA also raise concerns about Megaspeed’s ownership structure and GPU usage?Second, if trading continued after risk signals were raised, who approved it? It is critical to determine whether this was standard operational customer management, whether it was reported to senior management, or whether the CEO was directly involved. Third—and most importantly— Did the personal relationship between Jensen Huang and Alice Huang influence business decisions related to Megaspeed? If their relationship remained a private matter and Jensen Huang had no involvement in approving Megaspeed’s sales or customer due diligence, then the incident could be largely separated into a CEO personal privacy issue and a corporate export control issue. Conversely, if evidence emerges that Jensen Huang directly intervened in Megaspeed-related sales or internal decision-making during the period their relationship persisted, the nature of the incident would change entirely. At that point, it would no longer be a matter of infidelity but of conflict of interest and internal control failures. If actual violations of export controls are further confirmed, the issue could expand into a corporate-level legal risk. Therefore, I believe it is insufficient to focus solely on whether Jensen Huang was aware of Chinese intelligence activities. Before that, we must first answer a more fundamental question: What did NVIDIA know about the massive supply of AI hardware to a major customer with known risk signals? And to what extent was Jensen Huang involved in that process? Based solely on currently available information, we cannot definitively conclude that Jensen Huang was aware of any illegal activity. Past reports have even indicated that U.S. intelligence agencies previously assessed that Jensen Huang was unaware of the related intelligence activities. Conversely, none of the allegations have been fully resolved. That is precisely why the independent investigation by NVIDIA’s board and demands for congressional inquiries are so critical. For investors, the issue is not merely whether GPUs continue to sell well. NVIDIA is a core company in America’s AI dominance. As such, it is heavily influenced by U.S. government policy toward China and regulatory judgments. If this incident erodes the U.S. government’s trust in NVIDIA, even if sales do not immediately collapse, the company may no longer enjoy the same level of policy flexibility as before. Customer due diligence could be strengthened, and regulations on AI chip sales through Southeast Asia could become significantly stricter. Jensen Huang’s own political influence may also weaken. These changes may not immediately appear in next quarter’s financial results. But the stock market will react far sooner. Even if NVIDIA’s earnings outlook remains unchanged, if the market perceives increased CEO and regulatory risk, it may apply a lower P/E multiple. This means the stock price could decline even as earnings grow. Therefore, I do not view this incident as a fundamental collapse at NVIDIA. To date, there is no evidence that NVIDIA’s AI chip competitiveness or GPU demand has been damaged. Instead, a new variable has emerged—one that previously carried little weight: CEO risk and regulatory risk. What we must now monitor is whether these two risks will translate into actual business risks. Who was the true ultimate owner of Megaspeed? Who were the true ultimate users of the GPUs and AI hardware? To what extent did NVIDIA verify these facts? Were any internal risk signals ever reported? And most crucially—did Jensen Huang directly intervene in sales decisions or customer due diligence related to Megaspeed? Until answers to these questions emerge, I will not dismiss this incident as mere personal noise. The real risk to NVIDIA’s stock price is not the affair itself. It is the moment when a personal matter becomes entangled with corporate internal controls and U.S. government policy on AI chips toward China. There is currently no conclusive evidence that this line has been crossed. But given the scale of this incident, we can no longer afford to ignore this possibility.