Nvidia CEO Jensen Huang's affair with a reported Chinese spy damages this key investing factor

Investing in a public company's stock is more than crunching numbers.

I have heard from a lot of you about the hot water that Nvidia's ( NVDA ) celebrated CEO, Jensen Huang, is in following his admission to having cheated on his wife of 40-plus years with a reported Chinese spy. I said on X (see below) that Nvidia is now in its first true crisis, arguably since its founding in 1993.

Some of you pushed back on me for coining it a crisis, calling attention to Nvidia's strong demand pipeline and leadership position in AI chips. I suspect Jensen's vision has helped make you a lot of money through the years, so I get why the first instinct is to sweep this under the rug and voice support for Huang.

I am not going to deny that you have a point on the fundamentals of the business. I also won't deny that Huang is a generational founder of a transformational business.

But make no mistake: This is a crisis created by Huang that didn't need to happen. And it all boils down to trust .

If Huang can have an affair with a reported Chinese spy, can we trust what he says about AI demand being off the charts for as far as the eye can see? Can we trust that he didn't divulge company secrets to this person? Can we trust that this is a one-off for him and that he will emerge as a changed human being? Can we trust that he will finally put forth a clear succession plan?

Then there is this other aspect of trust.

Nvidia is not only one of the world's most valuable companies, with a market cap of $4.5 trillion, but it has also lent its own creditworthiness to drive AI infrastructure growth in the US and around the world. Over the past three years, the chip giant has reportedly offered $300 billion in financial support to customers, in addition to investing billions into risky AI startups, including neoclouds like CoreWeave ( CRWV ).

At the epicenter of this is trust in Jensen Huang, the human, and trust in Jensen Huang leading the company at such a level that he can make good on all these financial commitments. And as he makes good on these financial commitments, his wallet will stay open to support the AI ecosystem in good times and bad.

We can agree to disagree on this being an Nvidia crisis. But there is no disagreement on Jensen Huang having breached the trust of his investors, big and small.

Follow Brian Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email him at brian.sozzi@yahoofinance.com.