Jensen Huang saga threatens to prick AI bubble

Many theories. No tinfoil hats. But there are three worth discussing, particularly how quickly Jensen was ousted and how the whole thing has unfolded on the basis of two news reports. 

One that seems particularly plausible is that Jensen flew too close to the sun. In the last two odd years he increasingly got entangled within the Washington DC apparatus. The US government is nowadays treating AI, and the Nvidia hardware that powers it, as a highly strategic resource. According to the US government, top AI models and Nvidia chips cannot be allowed to move throughout the world freely. Jensen, while following the US diktat, has been fairly vocal about the approach. He has advocated that Nvidia chips should be sold to anyone who wants to buy them — though we are not sure if this is an outcome of his closeness with Alice Huang. Jensen has also taken an interest in open-source AI models.

Reports indicate that the US government was aware of Jensen and Alice's relationship. It was probably the reason why he was not, most likely due to objections from Rubio, originally invited to join Donald Trump's entourage for the meeting with Chinese president Xi Jinping. But then Trump allegedly overruled Rubio and Jensen boarded the Air Force One in Alaska. According to conspiracy theorists, this month some people in the US government decided that Jensen needed to go. They leaked the details of his affair to the media.

Another popular conspiracy theory too blames the government — but on this occasion the Chinese government. This theory argues that the Chinese were aware of Jensen’s affairs. The Chinese are also trying to deflate the American AI boom aka bubble because that will help Chinese labs and crash the US financial markets. This week they decided that the best way to go about it is to make Jensen and Nvidia hobble, and they leaked details of Jensen’s affairs to the media. 

The third theory argues that Jensen’s affairs with Alice and Kimberly were open secrets. Lot of people knew about it. This week someone in another major AI lab — Anthropic’s name has gloated in unsubstantiated rumours — decided to put a target on Jensen’s back. The details were leaked to the media. Rest we know. 

Of course, none of this negates the possibility that the Jensen saga is nothing more than what we see. A powerful tech tycoon had a couple of affairs, the media sniffed it and then reported on them, the moral outrage followed, combined with the geopolitical implications brought about by the involvement of Alice, and the Nvidia board decided to part ways with Jensen. In fact, this is the most likely story. But then the speed at which Jensen has been ousted, even before the Nvidia board could investigate the affairs, does raise some eyebrows. 

One of them is: Did AI somehow lead to the Outlook outage? Was it because some people armed with AI tools attacked Microsoft servers? Or was it because some AI-generated code was deployed and then it broke something fundamental in the Outlook servers?

Microsoft has answered the question categorically. The company said, “This was a technical issue not related to cyber or AI (or) agents. The incident was introduced by an issue during an earlier network capacity upgrade that surfaced following a recent network change. We have addressed the underlying issue and continue to restore service to remaining customers and regions.”

Reading between the lines, I believe Microsoft is saying that the Outlook outage was not due to any cyber attack or by any rogue AI. But the statement does not rule out the possibility that the outage was the result of vibe coding. 

And even if it was, I am certain that Microsoft, or for that matter any tech company, will acknowledge it. In the last one year or so tech companies have fired thousands of employees, arguing that AI can take over a lot of tasks. They are not going to acknowledge when AI-generated code breaks something. Blaming vibe coding for something will mean: one, they are wrong in firing human engineers, and two, the AI is not yet ready for primetime. No one, and definitely not Big Tech, wants to be wrong.