《TAIPEI TIMES》Huang’s gaffe unlikely to derail AI: sources

Global demand for artificial intelligence (AI) is expected to remain strong despite disruptions stemming from a controversy surrounding Nvidia Corp CEO Jensen Huang, with sources in Taiwan’s supply chain expecting only a limited impact on the industry.

A source in Taiwan’s integrated circuit (IC) packaging and testing industry, who requested anonymity, said in an interview yesterday that the long-term outlook for AI growth remained unchanged, although the controversy surrounding Huang could affect the supply chain over the next six months.

On Sunday, Huang acknowledged having an extramarital affair and cheating on his wife in an internal memo to Nvidia employees, saying his actions had hurt his wife and children. International media reports have alleged that the relationship involved a Chinese spy.

Amid national security concerns, three US lawmakers have reportedly asked Huang to attend a closed-door meeting to discuss whether high-end chips and AI servers were shipped to China through third countries.

The packaging and testing industry source said the US could not afford to slow the development of AI technology amid intensifying global technological competition.

“Once the AI train starts moving, it will continue toward its destination, particularly as China is catching up rapidly,” the source said.

In the short term, the US government is expected to tighten oversight of the AI industry and individual developers, potentially introducing new regulations for the sector, the source added.

Taiwanese suppliers have worked closely with Nvidia for decades and such a supply chain could not be built overnight, said an executive at a Taiwanese IC testing company, who also requested anonymity.

"It is necessary for the US to continue its efforts in AI development, or its competitors will take market share away," the executive said, adding that the long-term outlook for the AI industry is unlikely to change.

The AI industry is likely to continue expanding as major cloud service providers have pledged to increase investment in AI infrastructure to boost computing capacity, another executive at a Taiwanese semiconductor company said.

In addition, many other enterprises expanding their use of AI training require greater data center capacity, the executive said.

“Huang was not the only person responsible for creating demand for AI,” the executive said. “Even if Huang is removed in a management reshuffle at Nvidia, the company’s push for AI development is expected to continue.”

The executive said market participants should closely monitor how the US Congress proceeds with new regulations governing the AI industry following the controversy involving Huang.

Policy changes in several US states concerning AI data center development and power infrastructure warrant attention, the executive added.

“In the longer term, the US is likely to accelerate its efforts in AI development, and this trend is expected to drive growth in Taiwan’s supply chain,” the executive said.