In May, Nvidia CEO Jensen Huang told Singapore news channel CNA that he puts staff under the microscope “the same way Taiwanese parents torture people,” by subjecting them to relentless criticism.

After admitting to an extramarital affair with a woman US intelligence officials suspect was a Chinese intelligence asset, Huang should expect the criticism to 180 in his direction. The news sent Nvidia’s share price tumbling 4.3% on Monday and, with the allegedly honeypotted Huang now the subject of a company investigation, markets are wondering if he can hang on (probably) and if his indiscretion will hamper business (maybe).

An Ouster in the Cards

There has never been a US corporate infidelity scandal quite like this one. The national security element has placed the world’s second largest company at the center of an IRL spy novel, and the House Committee on Foreign Affairs wants Huang to appear for a closed-door briefing on November 18. President Donald Trump confirmed the FBI is looking into the matter, too, and said he spoke with Huang, who told him he had “absolutely no idea that the person in question was a spy.”

It’s unlikely that Huang’s affair will immediately impact Nvidia’s order book. In August, executives forecast a massive 70% revenue growth next year and financing demand for artificial intelligence, which relies heavily on Nvidia’s GPU chips, remains relatively robust. But Citi’s Atif Malik, while maintaining a buy rating on Nvidia’s stock, said investors should be mindful of “likely potential governance implications, increased regulatory scrutiny and export-control compliance of the flow of H200 chips into China (<1% of DC sales) and routed through other intermediaries, and long-term impact on leadership stability.”

Huang, who has led Nvidia since he cofounded it in 1993, is a human avatar for the company and arguably the most famous face of the AI boom. While making clear it’s currently unlikely, Morningstar analysts said the investigation and affair “may lead to Jensen Huang’s ouster.” They cautioned that “his departure could lead to less AI dealmaking and financing, greater regulation and more political backlash around artificial intelligence.” For now at least, the market is treating this as an isolated incident:

• The tech-heavy Nasdaq 100 rebounded 2.7% Monday after an up-and-down week following the midterm elections. Google debuted new variants of its own AI chips Monday, a sign of confidence in compute demand and that the AI race is proceeding undeterred.
• “It signals strong dip-buying investor appetite across the sector, coupled with market optimism that Nvidia’s issues remain contained,” said Mohamed A. El-Erian, an economist at the University of Pennsylvania’s Wharton School.

It Can Get Worse: New information is dropping fast, most of it bad for Huang. The New York Times reported that the US Commerce Department halted an investigation into Megaspeed, the Singapore-based firm where the woman he had an affair with was a director, after Nvidia intervened. The Financial Times reported she boasted to China-based investors of having access to Nvidia chips. Congressional hearings come with subpoena powers. Chris Coons, the Democratic Senator for Delaware set to chair the upper chamber’s Foreign Relations Committee told NPR investigating Huang is one of his top priorities. “This is a dynamic situation, and new information is much likelier to break against Jensen than in his favor,” said Alec Stapp, the co-CEO of the Institute for Progress, a D.C. public policy think tank. “Expect it to keep getting worse.”

Greg Abel isn’t the only challenger for the role of “Next Warren Buffett.”

KKR delivered a profit beat in its third-quarter earnings call on Monday thanks in large part to the success of its self-styled “mini-Berkshire” strategic holdings segment. In fact, the cover band did so well, Big Berkshire, which reported its own earnings on Saturday, may even want to take some notes.

Rest Insured

There’s a reason KKR started turning to the Buffett Playbook. Like much of the private equity world, KKR has struggled to find exit ramps for its various portfolio companies. Its solution? Packaging 19 investments together into the strategic holdings segment and enjoying the steady stream of dividends. Operating earnings from the unit — which mostly includes bets in healthcare, consumer and business services companies — reached $191 million in the quarter, up more than triple from the same quarter a year ago.

Berkshire, by comparison, saw its own operating earnings fall nearly 6% in the recent quarter, eating into profits. The problem? Geico, which saw pretax earnings decline 45%. KKR, meanwhile, similarly understands that running a major insurance firm is becoming so difficult a caveman definitely could not do it:

• Dividends in the strategic unit holdings helped buttress KKR from losses from its annuities and insurance portfolio company Global Atlantic, which saw earnings decline by 24% in the quarter.
• Meanwhile, in August, KKR agreed to a deal to sell USI Insurance Services for $17 billion. USI had previously been in its strategic holdings group, and KKR has already acquired three new firms to replace it: A1 Garage Door Service, fund administrator Gen II Fund Services and medical device-maker Integer.

“We are already well on our way to replenishing the forgone earnings from USI and feel we can grow the portfolio at a faster rate given our pipeline,” KKR CFO Rob Lewin said during the post-earnings call yesterday.

Bubble Babble: The investment giants have another thing in common: exposure to the increasingly wobbly AI trade. Berkshire tapped its massive dry powder pile to pour into Alphabet in the first half of the year, making the tech giant among Berkshire’s four largest holdings along with Apple, American Express and Coca-Cola (a 13F filing with the SEC, expected next week, will clarify the exact ranking). The timing wasn’t great: Google stock, battered by capex concerns, is down 26% in the past six months. KKR, meanwhile, has invested roughly $80 billion across digital and energy infrastructure projects. Co-CEO Scott Nuttall on Monday stressed the uncertainty of the AI trade: “No one knows how this will play out. This level of spend this fast is unprecedented, and we think it’s important to approach all of this with a lot of humility.”

Let’s get this IPO show on the road … just check Google Maps for AI potholes before choosing your route. Anthropic is expected to start formally marketing its planned debut today, 15 days after it filed to go public with the SEC. The Claude-maker is said to have meetings with investors on its calendar starting this week.

That would put it on track to debut on the Nasdaq next week, before Thanksgiving. But it could be a difficult time to convince investors to sit around the AI table and hold hands.

Time to Talk Turkey

Anthropic hasn’t set a price yet, but investors think its IPO could fetch a valuation from $1.1 trillion to $1.3 trillion. That’s down from $1.4 trillion to $1.5 trillion before that and as much as $2 trillion in early October. Those price tags were built on first-half revenue that grew about fourteenfold from a year earlier to $16.3 billion, per Anthropic’s S-1 filing — driven by big business customers asking Claude to help vibe code dashboards.

But as AI sentiment takes a sour turn, Anthropic’s roadshow will need to convince investors that its business model won’t be upended by recent events:

• While the wave in DC was blue, AI stocks turned red last week as investors anticipated an anti-data center policy shift. The Nasdaq’s (relatable) post-Halloween hangover started to let up Friday and Monday as the Nasdaq ticked back up. But the volatility may’ve taken a toll on confidence — and Nvidia’s You Only Live Twice scandal that unfolded over the weekend won’t help rebuild it.
• Nvidia has billions tied up with Anthropic. The chipmaker agreed last November to invest up to $10 billion in the AI lab, which in turn committed to using an initial gigawatt of computing power on Nvidia’s chips. Nvidia’s considering pouring up to another $10 billion into Anthropic’s IPO, Reuters reported in September.

Timing Is Everything: Anthropic isn’t locked into an IPO timeline, but delaying could cost it more than money. Rival OpenAI, freshly valued at $1.25 trillion in a private funding round, has already filed confidentially to go public as soon as next year. Anthropic may want to capitalize on investors’ remaining AI-ppetite well before the ChatGPT-maker arrives. And a lower starting price could set the stock up for a more successful narrative over time.