9AM HOUR: Nvidia Investigates Jensen Huang, Stocks Rally After 4-Week Slide 11/9/26

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0:43and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts. Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer and David Faber at Post 9 of the New York Stock Exchange. Coming off the S &P's worst week in a year and a half, bouncing a little bit less than a percent pre-market. A lot of chip names are higher, with the exception of NVIDIA, down five on Jensen Wang's bombshell admission.

1:16We'll get to it. Brent's down almost five bucks on these diplomatic hopes with Iran. The president does meet with the Qatari prime minister today. Gasoline almost back below$4 a gallon. Our roadmap begins with NVIDIA's key man risk, the world's most powerful AI executive admitting to an affair with a suspected Chinese spy, leading to a key question. Does the chip giant have a backup plan if Jensen Wong is forced to step down? Plus, Google is ramping up its challenge to NVIDIA. It is set to unveil two new specialized AI chips. And on deck this week, we are going to get the latest read on inflation.

1:52And we do have key earnings from CoreWeek, Applied Materials and Cisco, of course, we'll discuss it all. Let's begin with NVIDIA shares under pressure. Jensen Wong admitting he had an affair with a woman who's been accused of being a Chinese spy. The chip giant has opened an investigation into that relationship. Wong wrote an email to NVIDIA staff saying, quote, I owe my family and all of you an apology. There is no excuse for what I did. I'm deeply sorry. Leading NVIDIA is the privilege of my life. My responsibility is to serve you and be worthy of your trust. I've fallen short of that responsibility.

2:26I am fully committed to NVIDIA and will work to earn back your confidence. A big story that broke really yesterday, Jim. And I think a lot of viewers probably very interested to hear your take on this. Yeah, I mean, first of all, obviously really sad about it. Sad for his wife and for his family. I do think that there are real questions. I know that the board sort of looked into some of the new things. They had to go, obviously, to outside counsel. So the board was not told the truth the first time, which I think is very negative. I do think that any investigation, David, I think has to be centered around whether and how much he knew and whether the company was, as he was saying, the next core weave.

3:12And if it was the next core weave, then we should ship them everything. And that he did check off with the Commerce Department ahead of time. And the Commerce Department said it was OK. All right. You just did a couple of things there, but you went to the actual transactions that at least aroused significant suspicions at the State Department. At least that's what we seem to know. The Megaspeed company based in Singapore that you're referring to. That there have been allegations, I believe, is the fair point, was actually used in part to may have funneled chips back to mainland China. Right. But commerce was the organization.

3:49So the woman in question was an executive with Nagasby. Yes. But commerce was who you went to. So then you could say, well, did he go to commerce? Because he knew something more than we know, but wanted to be sure that commerce said it was OK. I believe the board was, if it was asked, would have been told that Jensen truly believed that it was the next core weave of Southeast Asia. Or did he not believe it but said it anyway because of the possibility that this Alice Wong, no relation, made it so that it was difficult for him to do anything else but? Yeah. It's hard to understate the importance of arguably the most important chief executive in the world.

4:38Yes, that's so. At a company that is key to our relationship with China and key in the race that we all hear about with the Chinese around AI. It's hard to understate the importance of that gentleman and then having a sexual relationship with a Chinese spy. Are you saying. Suspective. Thank you. Are you saying. She hasn't been heard from, by the way, or seen again for some time. No. And then the question is, you know, there are there are questions about when she left that company. I know that you may not think it is, but did she leave the company around the first piece, the October 9th, 2025 piece in The New York Times, which everyone in retrospect thought was very significant?

5:18And I would also point out, I mean, Jensen in 2024 was very adamant to me that, look, if you want the currency of the world to be the dollar, that makes a lot of sense. It's helpful. If you want the currency of computers to be CUDA, then it makes sense for you, Jim, to believe that this is something that we should have. So it's not like he was doing anything different, public or private. that he'd been saying this to me over and over again. Look, don't diverge on this issue. No, he was one of the biggest advocates for open source, for Chinese supply. He said that being a China hawk was a badge of shame.

5:57Exactly right. We're just now wondering where the motivations for that came from. Exactly. And to your point, open source as well. And they've been aggressive, by the way, in not just promoting open source, but, I mean, buying, hugging face of late and others that are part of the open source movement in a very significant way. Guys, I did, you know, spend time this morning and yesterday trying to talk to people who I've spoken to around these kinds of crises in the past who are really focused on governance issues and the relationship between the board and their CEO. First of all, this is kind of a weak board, to say the least.

6:31I don't want to draw that conclusion. Well, I'm going to say it because that's what others have said. I'll put it to you if you can give me your characterization. I think Dawn Hudson is a very objective, powerful person. A lot of these people have been with him for a very long period of time. They have original investors, correct? Well, let's change it from a weak board to a board that doesn't stand out as necessarily one that you would say would be tough on him. Yes, I think that's fair. I mean, it's rare that I look at a board of a company of this prominence and don't see any names that sort of jump out in terms of former CEOs or chairman of big companies.

7:03Not that they are necessarily the best board members, but that experience. No, I looked at them. I said, who can I call? How many people know these people? and what kind of network do I have? And I came up with one. Okay. And that's disappointing. Yeah, that's one more than I did on this one. But you mentioned the idea of him not being honest with the board previously. Yes. And if you were doing an investigation, I don't even know who the outside firm is or whether they've been hired by NVIDIA. And the board does conclude that they were lied to by Jensen Wong. Well, I mean, I got this. I got this.

7:42I got the statement when I first called about what was going on. And I got the statement from the company saying, listen, this is innocent. There's no conclusion. You can't possibly say this. I doubt that the PR people were ahead of the board in making that statement. I think that the board had what Jensen told them and went with it and made it so that that was the official statement. I just knew the official statement. It would seem odd for the official statement to be at odds with the board's position. Okay. Fair? Yeah, fair. I think one of the keys will be, was he honest with his own board?

8:15Right. If he wasn't, what action will they take if they, in fact, if after this investigation they find that's a fact? We've seen this many times. But so true to your point about the strength of the board, I'm looking at a report that you have on your desk. I'm sorry I didn't usually like to do that, but it made their team 2026 report by an outfit. I don't know. I don't either, but it's got a lot of inboxes. over the last 24 hours. Yes, it did. And it was pretty definitive. This report we're referring to was what you call a short report, certainly written by a firm. And again, neither one of us know it well, but it delved into specifically the relationship around Megaspeed in particular.

8:50And what it alleges were relationships with other companies in mainland China and basically being used to potentially, again, these are the allegations, funnel chips from there to the Chinese. And what is at issue, of course, here, we've talked about it so much with these high-speed chips that the Chinese have wanted because it can help power a lot more of your AI, and it is the key to impart our lead as a result of what these chips have been able to do, whether it's Blackwell or the next generation coming, Vera Rubin, and has been a key part of the discussion between our two countries in terms of what we would allow to actually be sold.

9:25So you're saying that perhaps it is possible that even though our policy was to not give the Chinese these, that Jensen knew that it was an easy way to give the Chinese these? I don't know. Because you know that the board was presented that this was a core weave. And why would you not have a Southeast Asian core weave? That would be a fantastic customer. And by the way, why don't they have one? I mean, it makes sense. I mean, if you had Michael Entrader sitting right here, I think you would say, yeah, I think you should have it. Everybody should have a core weave. CoreWeave is the way that you say that there's a customer that is checked off.

10:04When you go to Commerce, you say, listen, we think we have this CoreWeave outfit. Do you think that these guys are in the no-fly zone? The Commerce Department approves it. And that's all that happens. I mean, this is quite a—this report has all the photos. Oh, yeah. I mean, this was back in May. This was in May. They have Wong and Wong together in mid-24. Right. Numerous photos. But I do not believe the board was led to believe that this was a long-term relationship. And yet, when I read the Culper Report, what defines a long-term relationship, other than something that was lasting from 2024 to perhaps 2025, where there's a lot of people at the company believe that the New York Times article ended a lot of things.

10:47Including, possibly, the relationship, but certainly her involvement with the company. which is something that I did not know. What, you know, in NVIDIA itself, I can think of other corporations, Jim. Obviously, there are hardly any that rival it in terms of size. But if you think of the amount of security slash intelligence detail that goes into work around the CEO and who they're meeting with and everything else, that doesn't seem to describe NVIDIA. No, it doesn't. There is a way to believe that there isn't anything that he has, except we can go to President Trump for a segment, that he has that has not been open.

11:26I mean, there is NVIDIA. The way he runs NVIDIA, I know everything that everybody does. There's no secret to NVIDIA. He makes it very clear at the GTC conference what the company has. There's no this is not the secret sauce of Coca-Cola. And he's and he's giving it to them. Obviously, once about national security, whatnot. But there isn't anything about NVIDIA that everybody knows if you are a scientist, if you're someone in the semis. Yeah. But there's another angle. Was she trying to find out what our policy was or could be because he's so close to Trump? And that I don't know. Well, there's another part of this, Carl, which involves seemingly.

12:05And this is other reporting, the State Department and Rubio sending a memo to the president and seemingly being quite concerned about this. They learned about it. But why do we find out after the election? Well, no. To be fair, the initial reporting on this was, I mean, we didn't talk about it last week. But last weekend, the New York Times had a large report about this relationship. Right. Not necessarily that it was a mandate. No, I agree. I'm just saying, how I didn't know about the Ruby report? It would have been great to know ahead of the election. He's been asked to appear in front of Foreign Affairs, House Foreign Affairs, next week.

12:41Right? Right. So there was a sense that he was getting boxed in by China Hawks, essentially. Yes, he was. He was getting boxed in. The clock was ticking. I do think, again, we've got to try to figure out what the board knew about her. And the board, I'm not even sure the board knew when she or she didn't leave the company. Megaspeed, you're talking about Alice Wong. But apparently she disappeared from the company about the time of the New York Times article. The first one. I mean, there are some basic questions. Does he need a security clearance? And if so, how does he ever get one in the future?

13:18I don't know. Well, that's that's the layer is that even if he if the board decides to keep him, what does happen to chip restrictions? Culper argues that a fifth of sales find their way into China after being deconstructed. I found that I look at this point, I can't say, no, I don't believe that. That would be getting ahead of the story. I do know that there were people who believed that there should be sovereign AI. That had been something that a lot of people believed. These countries are countries that are very sophisticated. You would think that they would have a core view of their own. That's not unusual.

13:59Yeah. You believe that it's possible that someone could make a case that there wasn't, that if you didn't look deeper. I mean, look, the culprit has those same empty offices that you see those pictures. Jim, I guess, to end, I mean, from my perspective, I don't want to prejudge it. I will say haven't followed any number of these kinds of things, related things, for the many years. The facts rarely get better. They almost always get worse. And so if Jensen Wang is no longer the CEO of NVIDIA, what happens? OK, so then the question is the bench. I know Ben Rice has talked about the bench. I know that there are many, many brilliant people there.

14:37No kidding. I know that the management would say, the board would say, look, there are people who can step in. I don't think that's wrong. But then I'll go the other way, which is to say I never heard anybody other than collect crabs. It's not just that, Jim. It's about the political pressure on buybacks, on future circular financing deals. I mean, what will they optically be able to do to hold up the scaffolding of the AI build out like they have? Well, the big right. I mean, Jensen stood for deals that I think, in retrospect, will now question again about whether they're circular. The buyback, I was hoping they would be in there aggressively today.

15:20My understanding is that Jensen is supposed to come to work today. That would be somewhat dispositive of at least a man who is not hiding. Right. I don't want him to hide. If he came back to work today, I think it would be rather amazing. You did a piece this morning, and you said that if you didn't own it, you wouldn't buy it. No, you can't, because I think it's—why is it only down five? I had posited to myself, but I didn't want to just put it in there, that it's easy to see the stock down 10 percent. If the company isn't there supporting it—the company, for all we know, wasn't there supporting it on Friday.

15:54I don't know why they would be in there today. I believe, again, this story about whether it was a short lived, you know, liaison versus a longer does play a new role, because I believe the board was told that it was a short lived. Right. And again, a lot of it will come back to what did he tell the board and did he misrepresent? Exactly right. And that will be part of the investigation, by the way, earlier. And thankfully, we have a lot of our old executive producers who watch the show. I said understate when I should have said overstate. It is hard to overstate the importance. Oh, no. I mean, I think that the first you guys knew what I know.

16:34No, I mean, the first thing I was like, I mean, does he know that he runs the largest company? I mean, look, we don't want to. There's no reason that to characterize what's pretty obvious. Yeah, actually, there's a lot of interesting action in the chips overall. All AMDs higher today on an upgrade. Google is rolling out some new versions of some TPUs. They're up pre-market, as is the overall market. We'll get to more of it in just a minute. Legacy credit scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture. Vantage Score is changing that by modernizing credit scoring.

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18:58We'll get Kramer's Mad Dash get an opening bell in just a minute. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Something amazing is happening in networking.

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20:33We have seven and a half minutes before we get started with trading for the week right here at the New York Stock Exchange. Let's get to our first mad dash. We spent a lot of time appropriately talking about NVIDIA. Let's move on a bit. But, Cor, we're going to be reporting tomorrow. And not unimportant as a barometer for a lot of things going on in this market, including, of course, what has been a dramatic fall. And a dramatic fall in the price of their bonds, of which they've done a huge number of offerings. Carl mentioned about the idea of circular. I mean, Corweave is ground zero. I don't think that it's circular.

21:07Corweave's got a lot of good customers. Yes. But I do want to point out, David, that when I look at what's going on with Corweave, I think of one thing that we're not thinking enough about, financing. Will there be financing anymore? Why would you want to finance them? Their bonds are trading at a level that are 15, 16. They're unsecured. Their unsecured bonds have a yield that is extremely high. Now, there's a price for almost everything. Yes, there is. The question is whether they could obviously meet what would be those expectations in terms of what the market wants for an interest rate. Right, especially after the blue wave that was, I think we should remember, made it very easy to try to stop these data centers.

21:46Yes, the blue tsunami, as many refer to it. Yeah, I mean, which seems even more appropriate. But I think that the discussion from now on has to be, can they get financing? We never saw that market, the two-way market that Goldman Sachs and BlackRock and others were talking about developing. Now, maybe that is developing behind the scenes. It does take a long time to do that. And it does. It's securitizing something like a GPU. It's not something that happens overnight. It really isn't. Yes. And it's only been a couple of months since they actually had the big announcement on CNBC. And I think we'll find out from Mike Lintrader in his report that they still last very long, much longer than people realize, more than the five-year depreciation.

22:29But did he sell the last two years? Some of the good news for them, conceivably, would be given the price of compute and or the possibility that it will become a bit more scarce or not be built quite as quickly, will only make the compute they have even more valuable. More valuable. And I'll tell you one of the things I really don't like. I heard many stories today about now there's just a glut of NVIDIA chips. You know, that's just someone who wants NVIDIA down. There's enough reasons to sell NVIDIA. You don't need a made-up one. These pieces of compute are worth a great deal. We know that from Elon Musk.

23:00Elon Musk has been the person that has made the most out of the chips other than NVIDIA. Without a doubt. Those short-term deals that they have done are talking about, what,$50 billion? Exactly. Yeah. per gigawatt. Yes, I do believe that CoreWeave, by the way, they finished one and a half gigawatts. Now, I don't know again whether everything's been already sold. I don't know if the years seven and eight have been sold. But CoreWeave is the next big data point we'll get, and that's tomorrow morning. Okay. Well, we got a lot more this morning for you, of course, including an opening about four and a half minutes from now.

23:37Don't forget, you can catch us anytime, anywhere. Listen to and follow the Squawk on the Street Opening Bell podcast. On Tuesday, we allegedly had a clearing event, and that was the election. Many of the equity strategists that I know and I talked to said that once the clearing event is over, meaning the day after the election day, you should start buying no matter what. That was the prevailing wisdom. Well, ladies and gentlemen, it turns out that there really wasn't any clearing event. There was an unexpected route. The election was the most substantive that I can recall. Maybe it's in 10 years.

24:11Because I think one could argue that it stuck a dagger into the heart of the bulls. The heart being one of the greatest investment stories ever told, which is, of course, the multi-trillion dollar data center build out. That was Jim Holden Court Friday at the CNBC Investing Club annual meeting. Jim, talk about it. Talk about what they wanted to hear, too. Yeah, look, I think that people were, people wanted to hear the truth, so to speak. They wanted to hear whether I still felt that you should, in this particular case, own, not trade NVIDIA. And obviously, if the negative story comes out, you can't, you have to trade it.

24:54I do think that what we are seeing now is a bounce back from what may have been a couple of blow-ups. I've had fun, but that the story is not a great story in India. It's just not. The story is one of how many places can block data centers, how easy it would be to block them, and whether they don't become something like pipelines. It's either pipelines, which require heavy regulation, or nuclear power, which they stopped. Yes. We'll get to all of that in a minute. Let's get the opening bell here at the big board on Wall Street. It is Compania de Minas Buenaventura, a Peruvian precious metals producer, marking 30 years on the NYSE ahead of the Investor Day tomorrow.

25:36NASDAQ Times Square Semiconductor Materials Supplier Integris, celebrating Capital Markets Day. And at SIBO in Chicago, it's the floor operations team. We're back above 7 ,400, Jim, at the open, which was sort of a bounce attempt level on some of those routes you mentioned last week. Well, we need to see health care continue. There's been some really good news in health care. It's beginning to be reflected. The banks were up, and then people started talking about regulation, and they went back down. But there were many reports that were positive at the banks. Look, I just think that you have to start thinking about 2028.

26:14That was a big theme of my conference. And if you think about 2028, then it's just not a good time to buy stocks. It's just because you have to believe that corporate tax rates will go up if the Democrats win the White House because they can go back to where they were in 2016. I do believe the capital gains will go up to be equal to ordinary income. Which has been a key policy question in terms of why labor is taxed at a higher rate than capital. And some say has led to or certainly exacerbated the income disparity. Look, I think it can bounce. I think that, again, I'd like to see other areas come forward because I think the data center is going to be a fraught area.

26:59I just have been trying to deal with a lot of different localities about what needs to be done in order to have a data center. And no matter what, it's going to be slower. And if it's going to be slower, that does work for the incumbents, hence why I would buy Amazon. it works for Microsoft because they're going to now be regarded as this is what I said on Friday was it's kind of like a Formula 1, the yellow flag. No one, everyone has to go slower. No one's allowed to pass. If that's the case, that's Microsoft and that's Amazon winning. By the way, someone was saying to me, you know what, no one knows how to do deficit financing.

27:38They don't know how to be able to borrow more. Nobody's better than Amazon at spending beyond speeds from a generation of people who know that. And they were classically great at it. So to say that they don't know how to do it is to say that this Amazon move is wrong. And I think the Amazon move is very right. I was talking about it called the 300. Does Oracle get left out of that story, Jim? 115, it's now one of the worst S &P years of the year. Worse than Nike, worse than Netflix. I think the year-to-date low is 114 and change. It's a great question, but I think that they shrewdly, although surprised people, shrewdly raised that money on Monday.

28:12David, you know, that was of the clairvoyance of companies. How about moving that money, not waiting three years? Oracle did raise the money, the$20 billion that they had outlined during their big Oracle days in Las Vegas a couple of weeks back. Half of it in debt, half of it in equity. There is a story today, I'm sure you guys have seen, I think it's Bloomberg saying that Microsoft is winding down its Oracle deal to rent AI cloud capacity. That could be one reason why the stock is seeing a bit of weakness, saying they're winding down an arrangement to run AI computing as part of a larger reassessment of cloud partnerships.

28:49They say reporting that it became less useful for Microsoft because it no longer fit the company's specifications in terms of using older NVIDIA chips. Now, the point we have made many times is those older chips, and by the way, the ones the Chinese have been getting, or at least conceivably have been allowed to get, are still in great demand. Yes, they are. And actually going and being used on a per hour basis at a higher level or rental than had been the case years ago. So, you know, Oracle would make the point, I think, and has a number of times that if some key clients were to walk away, in the case we've talked about most often, it's OpenAI, which is obviously a key future tenant of the company's many data center projects.

29:33They believe they can just simply turn to somebody else. And so far, that's been borne out in terms of what we've seen SpaceX able to do with its compute. Well, they did tweet on Friday, demand for OCI's infrastructure remains strong. Although some of the desks today say it's not a great sign when you have to come out and say that. No, but I would say that we have not mentioned the real subtext of what's going on, which is that people need Anthropic, the deal. And would Anthropic settle for less than a trillion? Ooh, less than a trillion. Less than a trillion. Would they settle for that? Where was their last round?

30:10I believe it was, I want to check because the numbers have moved around so much, and I'm sure we can find it very quickly. But it would be hard to imagine them doing something at a lower valuation than their last round of financing. And I think it might have been, what was that? Say again? 965? Yes. Okay. So it was right around a trillion, their last deal. So I think that they might say, you know what, we don't need the money that badly. I would love to see Anthropic be done from the point of view of counteracting what I said at the annual meeting on Friday. But I just don't get it. I'm not feeling that Anthropic is as on the docket as I thought.

30:50You said the day you were at the meeting that you thought it probably needed to have a discount of some kind. Yes, I do. And we've been tracking the perpetuals, Jim. The perpetuals, the tethered perpetuals, don't look great for A &T. No, they don't. No. And I think that anthropics, like, we need to see someone other than Elon Musk making money here. Well, let's see them fill in that blank. Thank you. That blank on the S-1 for October. That's what we're wanting to do. I know I'm a broken record on this. No, you're not. But when they fill that in, in terms of what the annual run rate on revenues is, at least for what they saw from October, that will send an important message.

31:36I think the idea that they could come and actually accept a valuation as low as you just said, which is obviously still an enormous amount of money, a trillion dollars, might be viewed negatively by the market. Because you can imagine a narrative being, wow, they must be desperate. Right. Well, that's yes. That's why I'm hoping that they as someone who wants the dagger taken out of the heart, I would like to see them be able to say, you know what? We don't need the money that badly. Look at what we've been making or we don't have to show what we're making. We're so confident. I know that a lot of people buying AMD.

32:04Now, I would say that Lisa Sue was rather remarkably confident, justified by the numbers. Do I think it should be? I never thought it should be down. I know that I spent too much time perhaps this weekend looking at the charts, which many are broken charts. Oh, my God. You see Cosby? We're back to February lows, Jim. We took out the late March lows overnight. No, it's not. I mean, technically, you want to be anywhere but this group. And that does matter because people are looking for any guidepost. And the guidepost in, I'm going to mention it would be really ridiculous, but there was only one that was in support.

32:40That was NVIDIA. Not anymore. Oh, what makes you say that? Phew. Irrefutable. You can't even make up a story like this. No, no, I know. If you were right, if I wrote a spy thriller, it would be like, come on. I agree. I mean, I'm watching War. I don't even know what channel it's on. War, okay. But true to life stuff. Yeah? Yeah. And what's your point? No, my point is that novels and shows and Netflix and, yeah. I mean, look, I watched the Theranos thing for three hours. It was like compared to this. Real life. I mean, hey, I mean, other than the shower. I didn't ever watch. Yeah. I haven't. Well, I haven't been yet.

33:20I haven't seen it. You have. You seen it? Spoiler alert. There's some really crazy things in there. Yeah, I'm aware. Yeah. Oh, OK. Oh, geez. It is interesting that we are returning to the theme that we first visited right after the election Wednesday morning, which is that the compute that Amazon and Alphabet and Microsoft have is going to only go up in value if there are fewer data centers built. That reversed on Thursday, but now we're back to it. Yes, because it makes two— Is it sustainable as a theme? I think it is because, jeez, it's going to be really hard to cite. Now, none of these companies—I mean, Iran had a conference call on Friday.

34:01Iran moved big because they said it's really not going to be a problem. you have some of the real bounce-back candidates. By the way, Cisco, I think, is going to do a good job. And the stock is really full. And I say that because one of their competitors, Arista, had a remarkable quarter. But will it matter? I mean, that is a bit backward-looking. I mean, you heard David Sachs over the weekend arguing that he doesn't see how much gets permitted at all for a long time. I think that, again, we have instances where the government gets involved, particularly in 2028. a Democrat, if you have a Democrat at the White House and you have a sweep, the federal government can create, very easily, a regulatory commission.

34:41The regulatory commission would say, you know what, we have to wait, we have to look at these things for a three - or four-year period while we really get it down. And that's in play. I don't know anyone who thinks it's not in play. In other words, you have all these states, and that does not mean, well, you know what, we can go to Mississippi or we can go to North Dakota. No, we can't do that. It could be a federal issue. And if it's a federal issue, then we know how easily these companies will be tied up. Speaking of speaking of the White House and Congress back to work today. And we do expect the White House to pay close attention to the NVIDIA story.

35:14Let's get to Eamon Javers with more on that. Morning, Eamon. Yeah. Good morning to you, Carl. We heard from President Trump last night on this Jensen Wang sex and spying story. And the question here is how much support would the White House issue for Jensen Wang, who's obviously been very close to the president over the past two years at his side time and again at high-profile events. The president last night giving what I would describe, Carl, as sort of a cautious endorsement of Jensen Wong, stopping short of maybe a full-throated endorsement. Here's what he said. Take a listen. I think he's an honorable guy.

35:51I think he probably has an excuse for it. You have to hear it. Should he stay on as CEO of NVIDIA? I think so. Oh, yeah, sure. So the president there is saying he believes that Jensen Wong should stay on as the CEO of NVIDIA. Meanwhile, on another television network this morning, Hakeem Jeffries, the Democratic leader in the House of Representatives and presumptive next Speaker of the House, told reporters that he's expecting a classified briefing on Capitol Hill later today. He expects that the Jensen Wong NVIDIA story will be a part of that briefing. So there may be new details coming to Capitol Hill later on today.

36:29They often leak out after those briefings occur. So we'll watch for that today. And guys, the big question for investors is going to be if this woman at the center of the story, Alice Wong, who was the CEO or a top official at Megaspeed, if what she was running there, as the allegation suggests, was a front operation to get chips to China, how many chips went to China? Are there other front operations that this company, NVIDIA, may have been dealing with? And then, therefore, the overall question is, what percentage of NVIDIA's overall sales are illegal sales to China that went previously undetected?

37:06And if there's any effort to clean up by a new administration at NVIDIA or by existing management, what kind of percentage of a haircut is NVIDIA going to have to take as it goes back and pulls out all of those sales that may have been going to Chinese front companies? There's a lot here, and it might be material to NVIDIA. But I need this, Jim. I'm not sure they can get those chips back. Get them back, right. But, I mean, the board is going to be obligated to at least examine those customer relationships, I would think, in some way. And as we said earlier, Eamon, and this is a bit different, you know, the board itself has to figure out whether it was lied to by the chief executive and then potentially take appropriate action.

37:47You've been following Chinese espionage for a long time. I mean, these are tactics that are not unfamiliar, correct? Yeah. I mean, the honeypot is one of the oldest tactics in espionage, right? And the Ministry of State Security, I'm told by former CIA officials, is just very, very good at this. And this is standard operating playbook by them. Jensen Wang or anybody in his position at that level would have been warned against this time and again because it is standard operating procedure from Chinese intelligence. So that adds sort of an extra level of irony or pathos to the story. But you're right.

38:23The question is for NVIDIA's board is what percentage of our sales have been going to entities that are illegal under U.S. law? And how do we roll that back? And how material is that to the stock? NVIDIA, my understanding is NVIDIA technically should have the ability to know where these GPUs are and who's operating them, at least to some degree, due to things like the latency of the signaling back and forth between their servers and the GPUs. Where are they physically in the world? If there are customers in Singapore or elsewhere in Asia who bought hundreds and hundreds of GPUs but aren't servicing them in the future because they don't seem to own them anymore, where did those GPUs go?

39:05Those are questions that NVIDIA would have been able to ask and presumably would have been able to get the answer to over the past months and years. So there is going to be a question from U.S. law enforcement and from the intelligence community about how much of this was witting on the part of NVIDIA or NVIDIA's management. And that investigation leads you to a situation where there are at least four, Jim, investigations. The congressional investigation, the NVIDIA internal investigation. Certainly U.S. law enforcement is looking at this, and certainly U.S. intelligence are looking at this. That's a tough, tough set of facts for NVIDIA's board.

39:38Certainly. But, Eamon, what if the company went to the Commerce Department, as I understand, the Commerce Department said it was okay? I mean, that was the process in our country. you go to commerce and commerce says it's in the no-fly zone, you don't ship it to them. If you said commerce says it's okay, then you can ship. My understanding was that commerce gave them a green light. Yeah. Well, I mean, I think a lot of that's going to have to be looked at. And the question is, were there any misrepresentations to the commerce department by the company, right? Did the company suggest that, you know, these were Singaporean entities, not pass-throughs to China, and therefore they're okay, and commerce sort of rubber-stamped that?

40:13There's questions about the U.S. government's role here, too. Yeah, I mean, state has been, I would argue, compared to commerce on this episode, relatively visible. But, I mean, have we heard anything from commerce or Ludnick over, say, the past 72 hours? I have not, no. And so that's going to be a real question, right? What did commerce know and when did they know it? You do get this sense, guys, that there are, you know, the New York Times continues to cite four sources familiar with this information. And they keep putting another log on the fire every day or two in terms of new information coming out.

40:44Now, my just, you know, analysis of that is that you've got four sources who've got a lot of information and who are very determined to put it out. They're very aggressively putting this into the public domain here and including Marco Rubio's role as a skeptic inside the U.S. government. If they have recordings or some kind of surveillance transcripts of Jensen Wang's interactions with Alice Wang, there are a lot more logs that the U.S. government has to put on this fire if they want to continue to put the pressure on. And it feels very much like somebody inside the U.S. government, inside the administration, wants Jensen Wang out of this job and is determined to continue leaking until that happens.

41:22Yeah, that's an important point, I think, that you're making, Eamon. And, you know, in the conversations I had with a number of people around governance and people who worked through these kind of similar types of nothing is quite similar to this. But they came back to me and said a number of times it's going to come from the U.S. government. Not from the board. Correct. And the board has not suggested that he be severed, or the board has not said that he should have counsel. I understand. Yeah. There's a lot more to come here, as AIM has indicated. We should step back for a minute and just explain.

41:56Megaspeed is the Singapore neocloud that apparently buys NVIDIA chips, installs them in all these Southeast Asian data centers, and then runs out the capacity a la every neocloud that we know. Does that not sound like one? But the question is whether they really were doing that or whether they were simply funneling a lot of the chips back to mainland China. True, and then we don't know the answer. We don't know the answer. We don't. There's, right, we don't. We don't know. We don't know whether the board knew. And then, in fact, if, in fact, that is proved to be the case, what did the board know and what did the CEO know?

42:30David, from what, look, Amy just talked about board investigations. You're a publicly traded company. Do you decide, you know what, he comes to work today and it's just another day? Is that what you would do? Well, every minute spent addressing these investigations is a minute you don't spend with customers at R &D. What I'm thinking is, look, someone told me, Jim, if you had heard that Steve Jobs would pass away, did you think that they had a bench? And I would say, I know they had someone in mind, but I wasn't sure necessarily who that was. It's going to be a real challenge for this board. It turned out to me he was the greatest person you could ever have.

43:10It's true. It's true. Is that person at NVIDIA as well? If, in fact, this does. I mean, it's about the chips. Now, I know. He was the founder. He's been the CEO since day one. Don't talk to me. I revered him. Much of his board, at least some of them, I assume, have been investors with him from the early days. He's got an incredibly flat structure, but he has, what, 60 direct reports? Well, one of them probably is pretty good. Watch bonds today. NVIDIA, believe it or not, will not be the only story this week. We're going to get CPI tomorrow, PPI on Friday, as well as some Fed speak throughout the course of today.

43:48Ten-year, actually back to 485. Don't go anywhere. We've had some choppy action in the banks last week or so. Goldman relatively flat over that period of time, although it has dipped into the red for the year in the past few days. Right now, positive for the year by about 2%. We're going to hear from David Solomon today. Leslie Picker is going to have him at the Goldman Sachs Alternatives Summit coming up at 11 a.m. Eastern time. Meanwhile, Dow's up 700 and Stop Trading with Jim is next. Time for Jim and Stop Trading. If you want to monitor this data center trade and whether it can come back, I suggest that you monitor Bloom Energy, B, because they do have a terrific way to be able to noncombustible energy.

44:30It's been one of my heroic companies. They've done so much. They worked for 20 years to get this technology. So that one coming back, if it can really overtake the level and come back to 300, then I would say, you know what, there's a lot more hope than we thought that data centers will not be, again, persona number out of this country. I do think they will be, but that's how I'm measuring it. Yeah. Savita over at B of A today does raise the notion this morning of some EPS cuts to semis and maybe in Q1 if the back half of 27 does pan out the way you're fearing. Well, the one I would watch there and I think is doing incredibly well is Micron, which is making a nice comeback today.

45:10They report in December, but they also have that possibility of a big buyback announcement December 9th. I think Micron is doing incredibly well, incredibly well. And I also think it sells at three times earnings. And that usually means that it's about to sell at 20 times earnings. But they have a lot of long-term agreements. And I have tremendous faith in Sandro Mirotra. My travel trust does own my crime, and we have no desire to sell it this way. Jim, we'll see you tonight. Thank you. Mad Money, 6 p.m. Eastern Time. All opinions expressed by Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium.

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