Nvidia has appointed a leading US law firm to conduct a “thorough and independent” investigation into the relationship between its chief executive, Jensen Huang, and an alleged Chinese spy.
asserted
Nvidia → appoint → executive
The $4.1tn (£3tn) chipmaker has hired New York-based Wachtell, Lipton, Rosen & Katz for the investigation, which will be led by the Wachtell partner Joon Kim.
asserted
which → hire → partner
Wachtell’s website describes Kim, a former government prosecutor in New York, as a specialist in areas including internal investigations, white-collar criminal and regulatory defence, and crisis management.
asserted
website → describe → investigations
Nvidia did not give a timeframe for the investigation but the company has said Huang will continue to lead the business he co-founded “without interruption”.
asserted
he → give → interruption
The company is reeling from an espionage scandal after reports that its chief executive had been having an affair with an alleged Chinese spy, Alice Huang, who was also an Nvidia customer.
asserted
who → reel → spy
The US ambassador to China, David Perdue, said: “The situation with Nvidia is another reminder that we have to stay diligent.
asserted
we → say → Nvidia
And so, what we’re doing with China is bumpy right now,” he told Bloomberg Television.
asserted
he → do → Television
Nvidia had at first denied an improper relationship with the Chinese citizen, who is no relation to the Nvidia boss, but Huang then admitted on Sunday he had been unfaithful to his wife – without referring directly to Ms Huang.
asserted
he → deny → Huang
On the same day Nvidia announced an investigation into reports that Huang “has been the target of a foreign intelligence effort”.
asserted
Huang → announce → effort
The scandal has wiped $430bn off Nvidia’s value as shareholders gauge the potential impact of the scandal on a company and an executive who are synonymous with the AI boom.
asserted
who → wipe → boom
Its founding partner Martin Lipton invented the “poison pill defence” in the 1980s, a corporate gambit that helps companies ward off hostile takeovers.
asserted
companies → found → takeovers
Technically called the “shareholder rights plan”, the poison pill allowed investors to buy more shares at a discount if one shareholder acquired a certain percentage of the company’s stock.
asserted
shareholder → call → stock
This made it harder for corporate raiders to acquire a company without the board’s approval.
asserted
raiders → make → approval
The firm was closely involved in the takeover of Getty Oil by Texaco.
asserted
firm → involve → Texaco
This was the largest corporate takeover in history at the time, although it turned sour when the thwarted suitor Pennzoil sued Texaco and won.
asserted
it → turn → Texaco
In 2008, a team of Wachtell lawyers advised the US Treasury department on the takeover of Fannie Mae and Freddie Mac during the financial crisis.
asserted
team → advise → crisis
The company was founded in the 1960s and is said to be the most profitable law firm in the US.
asserted
company → found → US
It pulled in revenues of $5.1m per lawyer last year and made profits of $12m per partner, the highest profits per partner ever, according to the Am Law 100 rankings.
uncertain
It → pull → rankings
From 2017 to 2018, Kim was the acting US attorney for the southern district of New York, where he ran a team of lawyers investigating securities and commodities fraud, mail and wire fraud, public and private corruption, money laundering, cybercrime, and tax offences.
asserted
he → act → fraud
That included the case of the former US representative Anthony Weiner, who was sentenced to 21 months in prison for sending obscene material to a minor.
He also oversaw the prosecution of the banker Mehmet Hakan Atilla, who was convicted in 2017 of helping to evade US sanctions on Iran.
asserted
who → include → Iran
Another high-profile assignment landed on Kim’s desk in 2021, when he investigated multiple allegations of sexual harassment by the then New York governor, Andrew Cuomo.
asserted
he → land → governor
One analyst has put Huang’s chances of leaving Nvidia at 15%.
asserted
analyst → put → %
“Right now the Street and investor chatter is assigning roughly a 15% chance he is removed as CEO of Nvidia with a high probability (85%) he stays on as CEO after the board investigation is completed,” wrote the tech analyst Dan Ives in a note to investors.
asserted
analyst → assign → investors
“We would expect a board investigation that could take four weeks to six weeks and will create a clear overhang on the stock until more news emerges from Nvidia.”
uncertain
news → expect → Nvidia
Jeffrey Sonnenfeld, the senior associate dean for leadership studies at the Yale School of Management and the founder of the Chief Executive Leadership Institute, has put Huang’s survival chances at “about 50-50”.
asserted
Sonnenfeld → put → 50
The Aporia
