NVIDIA Probe, AI Export Controls and the Market Risk Ahead

0:00At Edward Jones, we believe rich is more than caring about the latest and greatest. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are with personalized financial strategies that help protect what matters so you can preserve your progress while creating a path forward. The key to being rich is knowing what counts. Let's find your rich together. Edward Jones, member SIPC. At Lowe's, this Veterans Day and every day, Military members, veterans, and their spouses get automatic Milo's Rewards Silver Status benefits. Plus, 10 % off eligible purchases with no annual limit.

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1:16Good Monday morning. Let's get a check on U.S. stock futures after a positive session for stocks on Friday that failed to erase Thursday's broad-based sell-off. The Nasdaq is now coming off its fourth down week in a row. Similar situation for the S &P 500. Both the Nasdaq and the Nasdaq 100 are firmly in correction territory. in what was a down week for all the major averages. You can see some green on the screen this morning, though. The S &P is poised to open up 28 points. The Dow, 305 points. The Nasdaq has just turned positive, right now indicated to open higher by about 22 points. Worse still for the semis, the SMH coming off an 11 % drop last week.

1:53It was the worst since April of 2025. Fun factoid, though. As we saw energy prices sell off last week, too, though, it wasn't tech. That was the worst performing sector in the S &P. was actually energy, which was down 12%. More on that in just a moment. Let's get a look at the bond market and treasuries with CPI and PPI data on tap this week. Those will be the big catalysts, if you will, from a macro data standpoint. You can see yields are higher across the curve right now. U.S. 10-year treasury yielding 4.86%. The Fed-sensitive two-year treasury, 4.53%. And the third-year U.S. treasury is yielding 5.26%.

2:31As I mentioned, energy, let's get a check there and what we're seeing with crude prices. President Trump saying fresh attacks on Iran are highly unlikely if talks with Tehran continue. We got a flurry of headlines over the weekend suggesting that diplomatic efforts continue here, but also that the administration, the president specifically, could be mixed in terms of what that looks like. The plan moving forward. More on that throughout the hour. But WTI is down about half a percent right now, trading right around$90 a barrel. Brent crude is also down about eight-tenths of 1 % right now, trading around$97.50 a barrel.

3:04That is, again, after double-digit percentage drops for crude prices last week. Overseas, it's a mixed picture for Asia. Saw the Nikkei close more than 2 % higher. We continue to keep an eye on the Kospi. That was down nearly 1 % after Friday's 8 % drop, what was called Black Friday, even triggered a halt in trading there. So we continue to track that, obviously very tied to semiconductors with SK Hynix and Samsung. Let's get a check on Europe, too. It's just getting its trading day underway. And let's see. We are higher across the board, again, with the major indexes in Europe. They fared relatively well versus the global sell-off that we saw last week.

3:45Let's get to our top story. Watching shares of NVIDIA. The company is opening an independent investigation into its CEO, Jensen Huang, and a relationship he has had with a woman who intelligence agency say is a Chinese spy. The New York Times reporting late Friday that U.S. officials concluded the woman, Alice Wang, was a top executive of an NVIDIA customer called Megaspeed, was recruited by the Chinese Ministry of State Security to spy on Jensen Huang. Alice Wang is in no relation to Jensen Huang. And on top of that, the Financial Times saying Saturday that the U.S. intelligence agencies believed that Huang and the female spy had a romantic relationship.

4:22Then, on Sunday, the New York Times adding another detail, that Secretary of State Mark Rubio had circulated a classified memo before President Trump's trip to China last spring, warning that Alice Wang had been recruited to spy for the Chinese. Now, in a statement to NVIDIA employees on Sunday, Jensen Huang writing, in part, I owe my family and all of you an apology. I was unfaithful to my wife. My actions hurt her and her children. and there is no excuse for what I did. I am deeply sorry. In its statement, NVIDIA's board of directors says it had no reason to believe that national security or NVIDIA secrets were compromised, adding the board has confidence in Jensen and his leadership team and will provide further updates as appropriate.

5:02They have opened an investigation, an independent investigation. In comments to reporters late yesterday, President Trump offering Huang a vote of confidence, saying he hopes everything is fine for a man that's been at his side time and time again over the past two years. I have not spoken to him about it. I just know he's a fine person, but you never know what is going on. I'm sure, I hope everything's fine. He's done such an incredible job. And so I would certainly hope he's a fine person, in my opinion. In hindsight, do you wish that you had acted on the intelligence when you were briefed about the spy monster?

5:39No, I don't think so. I think, you know, I think he's an honorable guy. I think he probably has an excuse for it. Yeah. You have to hear it. No, you can't do that with people. He was he's done an amazing job for our country. Now, for Jensen Wong to be removed as NVIDIA's CEO amid this investigation, there is no apparent succession plan in place at the world's most valuable company or one of the world's most valuable companies. NVIDIA reports third quarter earnings on November 17th. So next week, plans to hold a major conference in Washington, D.C. at the end of this month. and Huang himself has been asked to sit for a closed-door briefing with House lawmakers on November 18th.

6:16For more on the market reaction to the story, let's get to our Karen show in London. Karen, what are you seeing there?

6:26Good morning to you, Morgan. Well, we are seeing some of the technology stocks actually recover today and all closely eyeing what, of course, could happen with NVIDIA. But Asian stocks, You saw some of that green and red in the picture today. Investors continue to digest that stronger than expected U.S. non-farm payrolls data. Chinese consumer inflation data also cooled in September amid weaker domestic demand. And tech stocks were also in focus today after last week's sell-off. Well, the market participants are also digesting that news of NVIDIA's probe into CEO Jensen Tuang after he admitted an affair with a woman alleged to be a Chinese spy.

7:01Again, what does this do in terms of key man risk for the company? and what does it mean for the stack of technology companies. When we've seen Europe trade this morning, we were off to a fairly tentative start, but that positive footing now has emerged throughout the morning session. Markets, of course, still licking their wounds after last week's AI meltdown, so we're just clawing back some territory. NVIDIA, if we take a look at the Frankfurt-listed shares of the chip giant, they have slumped after reports of that investigation into Jensen Huang. They've largely also mirrored the pre-market move in the United States as well.

7:33But, of course, lots of questions asked. And to me, Morgan, what has been fascinating has been the reporting structure in NVIDIA of the years about up to 50 odd reports directly to Jensen Huang. So how on earth would you replace a founder CEO in that context? Many, many questions. Karen Cho, thank you. Well, joining me now with more is Chris McGuire, Senior Fellow for China and Emerging Technologies at the Council on Foreign Relations. Chris, it's great to have you on the show. Welcome to you again. Many, many questions. The one I want to start with, though, and that we haven't touched on yet, is the role of Commerce Department and all of this.

8:09That's that's coming to light here, too. The fact that apparently Commerce Department has been greenlighting chip sales to what are essentially allegedly essentially shell companies that are tied to the Chinese government as well. overall, whether it is the CEO of NVIDIA having a relationship and affair with an alleged Chinese spy, whether it's the president sitting on this information from intelligence officials for the better part of a year, or whether it's some of the chip sales that we've seen take place without a lot of scrutiny. How does it speak to the broader dynamic and the moment we're in?

8:45Yeah, I think this is actually going to be the more lasting story from this development, which is how did the U.S. Department of Commerce have the information that NVIDIA had such a close relationship with an organization that was being run by Chinese spies literally and did nothing to act on it? I think that is going to be a major source of question from the Congress, from both parties. I think you're already seeing it from Republicans. I think you will see it from Democrats. And I think it's going to be a big source of questions from inside the administration. How has the Commerce Department not taken action on this?

9:17I mean, the fact is the Department of Commerce has repeatedly loosened controls on entities such as Megaspeed. The regulations on the books that passed at the end of the Biden administration actually would have required a license for Megaspeed to buy chips. Those are not being enforced by the Department of Commerce. And as a result, according to The New York Times,$4.8 billion worth of chips have gone to Megaspeed alone. In this year, we have seen$80 billion worth of chips go to Taiwan, Singapore and Malaysia. They are the number two, four, and five importer of AI chips in the world. The fact is the flow of chips, of AI chips, of controlled AI chips to Southeast Asia and to companies like Megaspeed is a massive problem and something that I think the Department of Commerce really has to get its hand around.

10:04And the reason that this scandal happened is because those controls have not really been enforced. What I find curious is that based on some of the reporting we've seen over the weekend, it seems that the intelligence community, State Department, even Secretary of State Mark Rubio himself has known this and briefed the president or other officials in the administration over a year ago. Jensen Wong doesn't seem to have been briefed. And I realize that he's an American citizen. He's not part of the administration, to be very clear. He's part of a company. But but there is also at times a precedent that people get briefed on this.

10:43Thoughts on that? So that's true. And there very well could be reasons for that. You know, if the if there is an ongoing legal investigation into this, then they'll make a call about whether or not to brief the person or whether or not to pursue some sort of avenue. So I have obviously no insight into that. Yeah. It's you know, there there's there are reasons why sometimes they will do such a briefing. There are also reasons why sometimes they will not do such a briefing. I mean, obviously, the U.S. government has fairly significant information here about the dealings between Alice Wong and Jensen Wong.

11:16And based on what they're seeing, they made a call to not do one that may or may not have have been the right call. But it probably was informed, I think. And, you know, this situation will I think there will be a lot more chips to fall in this situation, so to speak. and that there's going to be further developments. But if there was not a briefing that was given, there very well could be reasons for that. Okay. Lame duck session for Congress starts today. We know that Jensen Wong is now going to be headed to the Hill to testify. Expectations around that and how it tees us up for a new Congress in January and what's already pretty vocally been suggested by the Democrats, a lot more oversight.

12:01Yeah, I don't know if Justin Huang will testify. I know that he was invited, I believe, by November 18th at the same time. Obviously, there's a lot of goings on with the company right now. I don't think that he's replied to that. So we'll see if that happens. I think that, you know, it's clear that the Republicans are asking for answers to this. I think you've also seen over the weekend, Senator Coons said that the Senate Foreign Relations Committee is going to look into the broader dealings between the Trump administration, AI companies in China, kind of implying that this is going to be an area of focus.

12:35It'll be interesting to see what the messages are on this going forward. Are they, you know, rolled into the broader set of Democratic investigations? or do you actually continue to see some bipartisan messaging on this? One thing to watch for in the next month in particular is the NDAA and the legislation related to export controls that is being considered as part of that. There's several very serious measures that would stop some of the flow of chips to China, some that would stop some of the flow of semiconductor manufacturing equipment to China, broadly AI-related export control bills that are being considered.

13:10I think this probably increases the likelihood of those being passed. There is still going to be a significant spotlight on executive action and specifically whether or not the Southeast Asia flows are going to be curtailed. But I think this probably lights a fire under the efforts to get export control related legislation done, especially in the next month or two. And then we'll see going forward how it manifests in terms of further regulations from the Department of Commerce. Yeah. One more question for you quickly here. And to your point, yes, you're right. Jensen Wong has been requested to testify.

13:43He's not scheduled actually yet to testify. APEC, how does this set up a meeting between President Trump and President Xi there? Yeah, I think it doesn't hugely impact it because I think the the that go forward no matter what. And frankly, the two sides have said that they are going to compete vigorously on AI and they may talk about it as well. So I think it largely doesn't change the status quo. I mean, I think that the perspective generally of many in the administration and particularly in the White House is that the United States has to vigorously compete with China and AI. Generally speaking, our ecosystem doesn't necessarily have to help their ecosystem.

14:24Theirs doesn't have to help ours. But that doesn't preclude dialogue with the Chinese on AI. And I think you've seen President Trump and President Xi talk about this issue multiple times. I imagine that you will continue to do so. And frankly, I think that's responsible. I think that the two parties should be talking about this issue because of its importance. But that question is separate from the question of how much should the United States be selling to China. And I think there is a world where the United States actually has pretty minimal sales to China or to Chinese entities and really cracks down on that.

14:54The Chinese ecosystem helps the Chinese AI development. The U.S. ecosystems helps U.S. AI development. But the two parties do find ways to talk about AI safety over the longer term. So I think that's probably where we're trying to go. And especially as the demand for AI chips in the U.S. remains so robust, that seems like a landing spot that seems reasonable and also one that I think NVIDIA and others could likely absorb without a lot of financial pain. If the mega speed is not getting chips, it means more chips for U.S. companies. And that's that's good. And there's demand there. OK, Chris McGuire of Council on Foreign Relations.

15:30Appreciate you starting the hour with us. Thanks for having me. A lot more to come here on Morning Call, including the midterm data center pushback and the Oneyo cloud taking his company's case to the Lone Star State's highest office. Plus, insurance hits Berkshire Hathaway's bottom line, but doing little to dent its enthusiasm for buybacks. And later, much more on the NVIDIA. It's just wrong probe and past CEO investigations offer insight on what's ahead for the chip giant. A very busy hour still ahead when Morning Call returns. With the Discover Cashback card, it's payback time when you earn cash back on everyday purchases.

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16:58If you remember when your VCR was your personal trainer, up and back and up and back. Feel that burn. Then remember this. RSV can be a serious respiratory virus. If you're over 50 with certain health conditions or over 75, it can make you really sick. You got this. There's no prescription treatment, but there is a vaccine that can help protect you. Find out more at PfizerForAll.com. Pfizer, out due yesterday. Welcome back to Morning Call. Anthropics striking a more than$3 billion deal to secure gas fire generators for its data centers. The Financial Times reporting the company has bought the energy commitments from Texas-based 1PWR.

17:41Speaking of Texas, CoreWeave is looking to work with its governor-elect on data center projects, sending a letter to Gina Hinojosa, stressing its commitment to responsible data center development. Now, this is follow-up from last week's midterms around data centers, continues with several newly elected Democrats and Senator Bernie Sanders renewing calls for data center moratoriums. Let's bring in Sean McGarvey, president of North America's Building Trades Unions, which represents more than 3 million skilled craft professionals in the U.S. and Canada. The union inking deals and MOUs in recent months with names like Oracle, OpenAI, Microsoft, Meta, and BlackRock.

18:16Sean, it's great to have you back on the show. Welcome to you. Let's start right there. Your reaction to what we saw with midterms last week and some of the commentary we've gotten regarding data centers and regulation. Well, thank you, Morgan. It's great to be back. Certainly a very interesting night, transformational night for the country with the decisions of the American people who ultimately make the decisions in this country. So when it comes to data centers, kind of a mixed bag, if you will. I know that our own polling and most polling that said data centers were an issue, but they rarely were in the top 10.

18:57The more pressing issues of affordability, the war in Iran and others that took center stage. But data centers were certainly mentioned in the exit polling. Whether it's in Texas with Governor-elect Hinojosa or other states like Ohio with Amy Acton, have you engaged with some of the incoming officials? And if so, what has been the takeaway? Well, we don't get involved in political races unless we're engaged on the front end on the issues that matter to us. So the answer to that question is yes. Look, we believe strongly and have believed strongly that there needs to be guardrails. Governor Shapiro's grid principles are probably the best laid out.

19:43I think other governors will be following those principles and rightfully so, making sure that we have strong community engagement, making sure the environmental concerns are dealt with, making sure that high labor standards are put in place as part of those guardrails, are all the things I think that have been being talked about and will be being talked about in an expedited manner at this point. Something that I thought was very striking at the end of last week was Governor-elect Hinojosa going on CNN and talking with a bit more nuance regarding potential data center policy and what that would look like with her as governor in Texas.

20:26Not so much moratorium on everything that's currently underway, but perhaps a slowdown and a longer review process, if I was hearing that correctly, about new projects. It seems like current and existing projects will continue to move forward. Is that your sense of it? And if so, given the fact that we're talking about hundreds of billions of dollars of backlog in proposed and in some cases already greenlit projects, what does that mean for your union and its workers? Well, I think that this conversation started well before Election Day, as did the discussion in local communities about them having their say on whether they want a data center built in their community.

21:07I think the backlog will continue to unfilter itself and new builds and new investment will go forward, albeit with some kind of safeguards put in place so that the final decisions as we support are ultimately made by local communities about whether they want a data center built in their community in or near it as it should be. What do you think is a bigger risk to the boom that we've seen for labor around all this data center infrastructure and build out? Is it, in fact, changes to regulatory policy on the state level or is it access to credit? And I ask that because IREN, which is a big neocloud company, actually cut its CapEx last week and said it's, you know, that it's getting very expensive to access the capital that it needs to build out all these projects the way it had originally intended.

22:00Well, I don't doubt that, you know, the capital cost constraints are an impact. We just had, you know, the Fed meet. We're looking at another Fed hike in December. All these things affect not just data center buildouts, but new advanced manufacturing, other kinds of capital investment across the country. So it's getting more expensive, not just for data folks, but for everybody in this economy. And it's the hope that, you know, this new Congress coming in and hopefully this president working with this Congress will start to bring overall costs down, which would include the cost of credit. Sean McGarvey, president of North America's Building Trade Unions.

22:44It's great to have you back on. Appreciate it. Great to be back on. Thank you. Well, straight ahead. Why it could be back to the debt markets for one hyperscaler. Speaking of, Warren Call is back after this.

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24:42The industrial side of the business did pretty well. Berkshire adding it bought back$9.6 billion of its own stock between July and September and about$2 billion more in October. Those shares are up fractionally right now. Alphabet reportedly talks about potentially offering its first Asia bonds from Hong Kong and Singapore, looking to raise between$2.5 and$4 billion. According to the report, the sale could come as soon as this month with proceeds likely used for, quote, general corporate purposes. And we're watching a number of China tracking ETFs. China says it will suspend an additional 24 % tariff on U.S.

25:13goods for another two months as Washington and Beijing look to extend their trade truce to next year, while keeping a blanket 10 % levy in effect. This, as China confirms, discussions are underway for a trilateral Xi-Trump-Putin meeting later this month. You can see those China ETFs on the screen are all in the red. Still on deck, though, Yale School of Management's Jeffrey Sonnenfeld is here. He's weighing in on what's next for embattled NVIDIA CEO Jensen Wong. You're going to want to hear what he has to say. Morning call. We'll be right back. I'm Morgan Brennan. Welcome back to Morning Call this Monday morning.

25:47Let's get a check on U.S. stock futures after a positive session for stocks on Friday that failed to erase Thursday's broad-based sell-off. The Nasdaq now coming off its fourth down week in a row. Take a look at futures, though, right now. Some green on the screen. Let's see if this holds. S &P is poised to open up 35 points. The Dow, 360 points. And the Nasdaq, about 51 points. So we're starting to build on the gains here pre-market. Treasuries are also in focus here. CPI and PPI data on tap this week. It's really going to be about inflation from a macro data standpoint. And you can see bond yields are higher across the curve this morning.

26:22U.S. 10-year Treasury yielding 4.86%. Fed-sensitive two-year Treasury, 4.53%. And the 30-year Treasury yielding 5.26%. percent overseas. A mixed picture for Asia that saw the Nikkei close more than two percent higher. The cost will be down nearly one percent. That's after what they've been calling Black Friday, that eight percent drop on Friday that triggered a trading halt. And Europe is just getting its trading day underway as well. And you can see some green on the screen again there. It's fared better than other markets globally in the past, call it, week or so, with the DAX up about three-tenths of one percent.

26:55We're also watching markets in Taiwan because authorities there have unveiled measures to restore investor confidence following the longest selling streak since 2022. They're putting a cap on short selling. It sounds like they're boosting margin requirements as well. And you can see the tie X finished up about 5 % in overnight trading. Well, checking some of the morning's latest headlines, too. The information reports that Anthropik plans to proceed with formal marketing to potential investors this week ahead of a November IPO. Despite their recent volatility around the tech and AI trade, the company reportedly plans to list the week of November 16th, next week, ahead of the Thanksgiving holiday at a$1.5 trillion valuation.

27:35Now, this is sources confirmed to CNBC that OpenAI has closed a new funding round of roughly$11 billion at a$1.25 trillion valuation. Key investors in the round include Code 2 Management, T. Rowe Price, and SoftBank, the information adding that OpenAI is expected to host a call with investors this week to discuss third quarter results. And let's move over to the energy markets because Axios is reporting that Vice President J.D. Vance is leading a behind-the-scenes push for a new diplomatic deal on Iran, reportedly speaking almost daily with intermediaries over the past two weeks. Speaking to reporters this weekend, President Trump says renewed strikes are, quote, highly unlikely so long as talks progress.

28:14And you could see crude prices are down a bit again this morning after a big sell-off last week. You could see WTI is actually back below 90 bucks a barrel right now. And another weekend of unrest across France. Officials say some 146 ,000 people participated in protests nationwide, with more than 46 ,000 in Paris alone. In some instances, police used tear gas to disperse crowds that were setting public property on fire and throwing projectiles at police. Let's turn back to our top story and shares of NVIDIA under pressure as the company's board opens an investigation into CEO Jensen Huang's relationship with an alleged Chinese spy.

28:53Now, in an email to NVIDIA Employees Sunday, Huang writing in part, quote, I owe my family and all of you an apology. I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did, and I am deeply sorry. In its statement, NVIDIA's board of directors says it had no reason to believe national security or NVIDIA's secrets were compromised, adding that the board has confidence in Jensen Huang and his leadership team and will provide further updates as appropriate. So joining me now with more, Yale School of Management Senior Associate Dean for Leadership Studies and CNBC contributor Jeffrey Sonnenfeld.

29:25Also with us, our own Eamon Javers, who has been covering this story since the beginning. And the beginning, Eamon, was not this weekend. New York Times was the first one to put out a story, and that was at the end of October. And you were all over this last weekend, or last week on CNBC too. So just in terms of the latest and where this brings us and what your own reporting from the weekend is yielding. Yeah, it looks like this steady drip, drip, drip. And that's sort of the worst situation for a CEO if you're involved in a scandal. The New York Times and the Financial Times have been relentless on this story, breaking sort of various developments as they go along here through the past week.

30:03And I think this puts an enormous amount of pressure. Jensen Wong putting a brave face out over the weekend, putting the statement out saying that he was unfaithful to his wife, but that he's intent on staying on at NVIDIA, the board sort of circling the wagons, that cautious statement of approval that you saw from the president of the United States last night. It was not full-throated approval, I wouldn't say, but certainly cautious approval from the president saying he thinks Jensen Wang is an honorable guy. All of that, though, is going to make it very difficult for Jensen Wang to hang on. And I think there's two reasons for that, Morgan.

30:36One is the relentlessness of the sources here for the New York Times and the FT. They keep citing four officials familiar with this situation. And these four officials keep putting out new information every time this story seems like it's about to die. And so there seems to be a real commitment on the part of somebody inside the U.S. government to push Jensen Wong out of this position. And presumably, given that there was surveillance of Alice Wong, they have a lot more details here on what happened than we do. And so the leaking could continue. And then the second thing is clearly there was some effort to misdirect the public by NVIDIA last week.

31:15NVIDIA put out a statement suggesting that Jensen Wong's relationship with Alice Wong was business as usual, nothing more than meeting with a typical customer, as Jensen does all the time. And then a couple of days later, forced to admit actually he had an affair with her. So So someone apparently lied to someone there. And that is the kind of thing that boards of directors generally don't like. And it's just difficult from a corporate governance standpoint to move forward. So did Jensen lie to his board? Did the board lie to the public? Those kinds of questions are going to be getting asked this week.

31:47And all of that is just difficult to survive. I mean, this is messy and getting messier. Raising so many questions here. Jeff, I mean, you're the perfect person for us to have on to talk about this. Not only do you know Jensen Wong and the company really well, but you're also somebody who has tracked and advised CEOs and leaders in corporate America over the years through all kinds of things, including controversies and crises. So how do you see this, especially when looking at your own notes going all the way back to 2005? We've never had a CEO who has managed to hang on to their job after an affair.

32:24No, and good for you for bringing it up, because so far in this discussion, the exchange that you and Eamon just had got us into some new terrain. I think we were talking about what different parties knew and what the uncertainties are that still remain out there. But up till now on the show, we haven't talked about will he be able to hold on to his position? I think it's about a 50-50 chance. But what Eamon raised and what you're highlighting right now is when we've seen people lose these positions before, it wasn't because we are so puritanical a nation, a culture that we're so worried about the infidelities and the frailties of human nature, whether or not it's in the CEO, corporate life or in public office or in the clergy or in academia or whatever.

33:09people make mistakes, but it's when they deceive the board that we have the problem. That's what happened with Mark Hurd at Hewlett-Packard. That's what we've seen at Boeing with Phil Condit and things like that over the years. It was when the board didn't have full information or there was some element of deceit. Now, there's an awful lot of confidence in this guy. A year and a half ago, we gave him our Legend and Leadership Award. It was because the CEOs unanimously, past winners, identified him. We had everybody fighting from Tim Cook of Apple to Michael Dell, of course, of Dell, Mark Benioff of Salesforce and others to pile on well-deserved tributes.

33:46What he's done in the last 33 years is pretty remarkable that as a bunch of guys sitting around at Denny's with$600 that have now built this up into a$4.5 trillion business, and they are the vanguard of some of them. They have 200 investments in 240 other companies on the AI frontier. And a lot of that is centered on him as a key person. And the questions for the board here, big questions and big questions for Congress and big questions for the executive branch. I want to go back to that last point you just made. And I mean, a lot of folks have called this circular financing. They've got a huge amount of partners.

34:28They've got recipients and companies, including opening eye that they're backstopping. Questions about succession here for this company and questions also about this idea of, given the fact that so much of this does hinge on one man, is it a company that's too big to fail? There's a lot that's woven in here. With the circular financing, we have just about$100 billion of dedicated financing that's into the equity of these roughly 200 companies. And there are some pretty significant companies from Intel to SpaceX to whatever, OpenAI, Anthropic, some are public, some are private. That's a lot that's wrapped up there.

35:07There's another 100, a little more than$100 billion that's promised OpenAI just on data center build outs and things. And then you have that pretty spectacular deal where we had seven titans of Wall Street pledging about, what,$600 billion of capital for other build outs. And Jensen Huang has guaranteed that if those companies somehow crater on that collateralization, basically creating a new asset class to invest in AI, if that should falter, they've promised to provide at least 25 percent of that. So that's a big concern. And on all these companies, there are also customers as well as investment assets.

35:51So that's a big problem. The board on succession plan, I know a couple of people on this board. They're wonderful people. I don't see any one of them being able to step in here in a time of crisis. Some of the people that have been talked about, whether or not it's the highly respected CFO, the chief operating officer and others, there are six very, very good people that are well known in senior management. None of them have ever led a public company. None of them have the visibility. Jensen Huang has been very proud of how he's managed in such a flat way. that he has so many direct reports. Somebody suggested, and he has suggested as many as 60 direct reports.

36:28The late Ted Turner often had a similar arrangement. That's highly problematic. And so, and then you have Congress chomping at the bit. I've spoken with several legislators over the weekend. It is, Senator Elizabeth Warren is eager to get involved in some of the Senate Banking Committee, but it's really the Senate Intelligence Committee that's already working on this. People have talked about the House and what's coming up in two weeks in the House, but you have Mark Warner and Tom Cotton, who despite political differences, have a very good working relationship. And backing up, each of them are very experienced people that want to get involved here from Susan Collins to James Lankford to John Cornyn on the Republican side.

37:12On the Democrat outside, you have very, very strong people. Mark Kelly, Senator Wyden. So the board questions on succession, the board questions on who knew what, where. And then the big questions are, as you were asking before, where in the world was Howard Lutnick and commerce that's supposed to oversee these chips? What is Jay Clayton, of course, to be fighting to get to the top of this as the director of national intelligence? And then we have other questions about the attorney general. So there are a lot of questions to be asked as to who's doing what. And we still don't know what information was conveyed.

37:49Is it, was there circumvention of trade restrictions, which is very problematic, or is there something worse in terms of information that flowed or nothing? But some suggest that companies have been put into a brief administrative oversight, Somebody that you can parachute into to put in an acting role. But with all these investigations, how can the CEO, I've joked with Jensen Wong before, how he's at always every conference, every media outlet everywhere all the time. But how's he going to be everywhere in Congress and still running and in the board and all these other investigations? And Eamon, that's exactly the question I want to ask to you is you mentioned a lot of these leaks coming from State Department.

38:31This obviously shines a very big spotlight on commerce and how they've greenlit some of some of these chip sales over the past year. Who knew what over the past year? And then the role of what's maybe not going to be such a lame duck, lame duck Congress that kicks off here. How does this expose inner workings that are evolving in real time of Washington? Well, it really does. And I think, you know, one of the keys was over the weekend when we saw this leak to The New York Times that Marco Rubio, the secretary of state, had prepared a memo back in the spring detailing these allegations and detailing what the U.S.

39:06intelligence community knew in a classified way behind the scenes about Jensen Wang and Alice Wong and the Chinese angle and circulated that in Washington ahead of the president's trip to China. And then, of course, you remember that famous moment where Jensen Wang was not invited on that trip to China. Everybody was kind of surprised. And the president called him out of the blue, picked him up in Alaska. Well, maybe we learned a little bit more now about why Jensen Wang would have been left off the manifest for Air Force One by some officials in Washington. And you do get the sense that behind the scenes there is a power struggle in Washington over Jensen Wang's access.

39:42And Marco Rubio may have been one of those officials pushing to push Jensen Wang out of the president's inner circle because of these allegations, others pressing to push him in. I think we'll learn a lot more about that as the congressional investigation gets underway. And I think the key question here is not just about what did Alice Wang, the alleged Chinese spy, know about NVIDIA and its chips, but also that very personal relationship between Jensen Wang and the president of the United States. Remember, they only met back in January of 2025. You think of them as best friends forever, but it's really best friends for two years.

40:17And Jensen was right at the president's side. Did Alice Wong have access to Jensen's devices when Jensen wasn't in the room at any point? Did the Chinese intelligence service have access to Jensen's communications with the president at any point? Was she pushing him to push the president on anything related to Xi Jinping at any point? We don't know the answers to any of those questions. They're all very important questions. And I think Congress, the intelligence community, and maybe law enforcement are going to want to get to the bottom of all of those. Sounds like we have the next idea for your next podcast series, Eamon Javers.

40:51Thank you. And Jeff Sonnenfeld, our thanks to you as well. We'll be right back. It's time for your call sheet where we look at the topics driving the trading day ahead. Crew members today, Peter Scheer, Steve Sosnick, Ed Mills. Great to have you here. We're a little crunched for time, so we're going to get as much in as quickly as we can. I'm going to lightning round this with you. Peter, I'm going to start with you. We were just talking about it. We've been talking about it all hour, but this NVIDIA spy story, your reaction? Wow, it's straight out of a movie or something like that. I think the fact that we work with a bunch of CIA people, we've always been very suspicious about anything with China.

41:22We know China's trying to build cheap compute. They're probably taking every single step they can. Whether this is real or not with NVIDIA, we don't know yet. But I think we have to be well aware China wants to make their own compute industry. They want to make their own chips. They are going to do everything in their power to do that. And that's a threat to our industry. Ed Mills, how does this speak to the current climate in Washington off of midterm elections right now? Yeah, when I talk to clients, they're really concerned about export controls on China being increased. This near guarantees it.

41:49We're watching the Match Act, which has real severe restrictions on Chinese semiconductors and semi-cap equipment, what can be shipped to them. I think that either goes in the lame duck or early next year. The big question is, how tough does that actually get? Can we work out a deal with the Dutch, with the Japanese? and it is an implantation. I'm not quite sure about how deep this goes. And this is a real concern out there for tech investors. Yeah. And yet, Steve Sosnick, NVIDIA is only down about four and a half percent pre-market, even as the Nasdaq overall adds to gains here before the opening bell.

42:24Has that reaction or lack of reaction surprised you? Yes, Morgan, a bit, because this seems to be bad news across all levels and bad news for the AI industry. Also, with the change in administration, this makes policy very tricky to play out going forward. You know, the market was a lot bit surprised by the big fall that we had last week. But our chairman was on another show on the network a couple of weeks ago saying, if the Democrats had a landslide, watch out for the markets. And so right now, I get the sense that people feel that we had a one day drift down and we're better. But I think that may be a bit premature at this point.

43:04We got quite a few headlines over the weekend, Peter, regarding changes in the administration itself, including Stephen Miller taking over as chief of staff from Stusey Wiles. Comments from Hakeem Jeffries over in the House as well that, yes, absolutely, they're going to move forward with impeachment of Defense Secretary Hegseth. A number of other things, too. How does all this factor into market sentiment? Yeah, so I think even last week, one of the things we talked about is the election results were important. We're seeing volatility. How it plays out, I think, is going to really come down to how the winners behave, how the losers behave.

43:36And we were hopeful maybe you'd see some sort of reconciliation, maybe some sort of pull towards the middle. And if anything, it looks like with the choice of Stephen Miller, Trump's going to double down. It looks like Hakeem Jeffries is going to go down the impeachment path. All of that, I think, is really bad for the U.S. It's bad for the economy. I don't like to see that. So I think the markets are going to wind up having to price in a lot of friction in D.C., and that's not going to be good. What is all this going to mean, Ed, for the war in the Middle East here, especially as we've also gotten reports that Vice President J.D.

44:04Fance has been for the last couple of weeks hands on in terms of finding a diplomatic result? Yeah, Morgan, we're in a D.C. wall of worry. He might be looking for that diplomatic result, but it's unclear if Iran will be willing to meet any of the U.S. kind of demands here. We're also up against an APEC summit that's later this month. Then we have a December 11th funding deadline. President Trump hopes to have a trilateral meeting at the APEC summit that could be possibly followed up at the G20 summit at his home turf in Doral on December 14th, 15th. But it's not clear if we can get any government funding, especially on defense, if the Iran war is still going on.

44:46Democrats just can't vote for that. And so our base case at Raymond James is if we either get a shutdown in December or a short-term extension into January, February, and then in January, February, that's where we get the shutdown if we can't have a full end to this war in Iran. Meantime, this week, we're going to get key inflation reports, CPI and PPI, Steve, and also an anthropic IPO roadshow. Yeah, this is a big week. I mean, we're going to learn, you know, we're just starting off in a good mood right now. And I think that there's nothing wrong with that. But there's a, you know, there's the wall of worry to be climbed because certainly, you know, we got a strong labor number, which essentially makes the Fed, turns the Fed back into a single mandate Fed because they could just worry about inflation from this point on, at least, you know, from the next month or so.

45:32And so that, you know, puts the pressure on delivering a good number for inflation and getting the market back in the frame of mind where it can sort of, you know, lick its wounds from last week and turn higher if it wants to. I still think there's a lot of risks that may be not fully embraced by the market, though. All right. We got sub 30 seconds here. Final thoughts, Peter. Watch out for volatility still in the tech space. I think cheap Chinese compute. Watch how the Anthropoc IPO goes. That could be the turning point. If it goes really well, they raise sufficient money. That could get us the bounce.

46:05Away from that, though, I think the noise out of D.C. is going to put risk in the markets. Be careful there and look to the global markets. They are doing better, and everyone is trying to figure out how to make their own economy stand on their own. I think that opportunity is in foreign markets right now. Okay, sounds good. Thank you so much to our call crew. Great to have all of you here. We did cover a lot. Look at us. Real talent is defined by what people can do, not where they learn to do it. So by stopping at the education section of a resume, you might throw away the perfect hire. Skills First Hiring helps you see talent others miss, like more than 70 million stars, skilled through alternative routes.

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