This Is the Problem With Oligarchy Right Here

On Thursday morning, Jensen Huang resigned as CEO of Nvidia. On the day before, it had become known that he’d been having another affair alongside the one he’d been having with a Chinese spy, this time with Kimberly Powell, the company’s vice president of health care. It quickly leaked that the Nvidia board was going to sack him, and Huang gave up and quit Thursday morning.

This unleashed chaos in the markets. Nvidia stock had plummeted by more than 10 percent after trading opened, though it bounced back somewhat after that. At time of writing, it was down to $160, from its Friday price of $193. That is something like $800 billion in market capitalization gone in the space of a few days.

Now we all get to wait on tenterhooks to see if this tawdry scandal touches off an economic crisis, or what huge ramifications come out of Huang’s likely divorce. He has no prenuptial agreement with his wife of 40 years, Lori Huang, and if they divorce, under California’s law that gives her half of the accrued wealth; she will become a mega-billionaire. That money buys a lot of influence. Will it be good or bad?

Huang is out because, remarkably enough, Nvidia is one of the better-governed tech companies. Unlike Meta, Alphabet (Google’s parent company), Snap, and of course SpaceX, Nvidia does not have a dual-class share structure, in which the company’s founder(s) get total control over the company despite only owning a minority of the shares. As I have previously written, that practice makes a hash of the entire argument for a public corporation and greatly increases the risk of poor business decisions.

Neither the board, nor shareholders, nor public pressure could pry Mark Zuckerberg out of the big chair at Meta if he refuses to leave, no matter how many tens of billions of dollars he wastes on some cockamamie metaverse nonsense. But because Huang and his wife only control about 3.6 percent of the company, the Nvidia board and shareholders have real power. When he screwed up badly enough, that was it.

That said, Huang had still made himself the center of the business in many ways. He was a quintessential Silicon Valley hero-founder, always wearing his signature leather jacket, and treated like a celebrity around the world. He reportedly had 60 people reporting directly to him, as compared to the traditional five to seven for a CEO.

As I wrote regarding Huang’s first reported affair, this mess leaves multiple large question marks hanging over global society. To be clear, I don’t buy the hero-founder myth; without a doubt, somebody at Nvidia or elsewhere could do the job just as well as he could. (Just don’t break the law or screw around on your spouse and you’re halfway there.) That said, the fact that so many people on Wall Street and among retail investors do believe the hero-founder myth could create a self-fulfilling prophecy. And concretely, Huang’s odd management style will mean either the new CEO will have to adapt to a highly unorthodox approach, or conduct a major organizational restructuring, which may disrupt the business.

What’s more, something I neglected to cover in my first article is that Huang’s first affair may have been part of a straight-up conspiracy to smuggle huge numbers of Nvidia chips into China. His Chinese spy girlfriend Alice Huang ran a company called Megaspeed in Singapore, which some analysts allege is funded by Alibaba, the Chinese retail behemoth. It sure is very odd that Singapore should have suddenly started importing so many Nvidia chips that as of mid-2025, the city-state represented some 22 percent of the company’s total sales—which is roughly the same share that mega-nation China accounted for before export controls came down. After mid-2025, Nvidia simply stopped reporting that figure. Furthermore, investigations have found Megaspeed’s supposed corporate headquarters sit largely empty. Curious!

Just as I was finishing this article, The Information reported that Alice Huang had invested in the Chinese AI company DeepSeek, promising them Nvidia chips.

So in addition to general chaos and market panic unleashed by this scandal, it may cause a sharp decline in Nvidia’s sales, if not huge legal sanctions for violating American law. (Even Kash Patel’s FBI might be too embarrassed to avoid enforcing the law this time.) That will surely lead it to pull back from its investment in both AI labs and AI data center companies. If so, does that knock down the weaker, heavily indebted ones—like CoreWeave, Oracle, or OpenAI? What knock-on effects might that have on the financial companies that lent the money? That’s how a financial crisis gets rolling.

Finally, there is the unfortunate question of Lori Huang. The couple met when they were broke teenage college students and have been married since 1985; they have two kids. If the Huangs get divorced and she gets half of the marital assets, she would instantly become roughly the 30th-richest person in the world, with a fortune in the $60-odd billion range at time of writing.

That could turn out largely fine. MacKenzie Scott, Jeff Bezos’s ex-wife, turned out to become the rare mega-billionaire who actually gives money away to people who need it at a rapid clip, instead of to fake charitable foundations run by dim-witted relatives. (Even that, I would argue, is inferior to aid programs conducted by democratic governments.)

But it could also turn out to be a disaster. When Google co-founder Sergey Brin’s former wife Nicole Shanahan reportedly had a brief affair with Elon Musk (don’t ask me), she got about a billion dollars out of the ensuing divorce settlement in 2023. With that, Shanahan became one of the largest funders of the anti-vaccine movement, then one of the largest funders of Robert Kennedy Jr.’s presidential campaign in 2024, and then eventually his running mate. It is reasonably likely that without this funding—which included shouldering most of a $7 million Super Bowl ad—Kennedy would not be leading the Department of Health and Human Services today.

I should emphasize that there is no indication that Lori Huang is a delirious crank. All the accounts I can find report she is a perfectly decent person. My point is that it is a disaster for society for anyone to have this much money, because the downside risk is just too great. Just one billion dollars was enough for one crank to hoist another crank into the most important public-health position in the world, where he slashed funding for cutting-edge medical research, fired world-class scientists en masse, and completely failed to control the worst measles outbreak in more than 30 years. This kind of thing can happen as an incidental consequence of apparently rampant cheating among the billionaire class—even with a prenuptial agreement; Shanahan got less than 1 percent of Brin’s fortune.

Hyper-concentration of markets means that one man’s sexual indiscretions can become an entire planet’s economic problem. The concomitant hyper-concentration of wealth means that the ensuing divorce court details can have world-historic implications. Pennsylvania babies should not be dying because of some random oligarch affair, and if we taxed billionaire fortunes out of existence, they wouldn’t be.