Billions lost and markets roiled by one man’s indiscretion. Isn’t it now clear that these tech bros are too powerful?

Nvidia CEO Jensen Huang’s affair must be the costliest fling in human history – and a preview of what awaits when the tech bubble bursts

One thing we all know about the tech billionaires is they are super-smart. We know this largely because they never stop telling us. The “cognitive elite”, to use their favoured phrase, are entitled to shape our future without our say-so. When Elon Musk goes hiring, he wants “super-high-IQ small-government revolutionaries”. Long before they got private jets, what fuelled these boys was faith in their own brainpower. As a teenager, Jensen Huang wooed his future wife, Lori, thus: “If you do homework with me every Sunday, I promise you you’ll get straight As.”

Which raises the question: if you’re that clever, why act so dumb? At last week’s midterms, it was Musk who backed Team Trump to the tune of $446m. With unhedged bets like that, why wouldn’t you want him gambling with your livelihood? This week, it is 63-year-old Huang and his affair with a much younger woman, who the US government strongly suspects is a Chinese spy. That scandal wiped more than $400bn off the value of his company in just two days, making it the costliest fling in human history. But who knows? Perhaps she loved the centibillionaire for his mind.

Forget Sam Altman and Dario Amodei: no one is more central to the future of technology than Huang. He runs Nvidia, which makes the chips powering AI. Previous generations of chips have been compared to kitchen knives: however sharp, they only chop one vegetable at a time. But the graphics-processing units made by Huang’s business are more like food blenders – they can blitz an entire veg patch. That’s what makes Nvidia the foundational infrastructure company of AI and one of the most valuable businesses in the world. And it uses its power: in some of the biggest funny-money deals over the past year in AI, Nvidia has been the money printer. It also stumped up at least $20m for Donald Trump’s new ballroom. Smart!

Not only is Huang one of Trump’s favourite businessmen, he’s warmly welcomed by leaders around the world – including Andy Burnham, who last month in London sank a whisky with him. Even as he falls from grace, Huang’s supporters have brought out the superlatives: “torchbearer”, “irreplaceable”, “incredible human”.

Huang is boss of the most strategically important business in the fastest-growing, biggest-spending industry in the world’s No 1 capitalist economy. He is part of a tiny coterie of people, who may well feel they sit above the norms and laws that govern the rest of us. That’s certainly the way he has been treated so far by Trump, who was personally warned aboard Air Force One that Huang’s love interest is believed to be a spy for Beijing. Not only is China an ever-greater threat to US AI dominance, it has been banned by Washington from getting Nvidia’s top-of-the-range chips. And the US president takes no discernible action.

Some people are in a huge tizz about the spy part of this story, notably the Tory MP Tom Tugendhat, who, after Vladimir Putin invaded Ukraine, demanded that every Russian in Britain be rounded up and expelled. The force is not strong in that one. Personally, I can’t get too excited about the threat to the Trumpian model of AI. Neither, it seems, can Washington: it’s been more than a year since Nvidia was revealed to be selling some of its best stuff to a “dilapidated storefront” outside Kuala Lumpur, which sounded awfully like a pit stop on the way to China. Again, no action. The message ordinary Americans can take from this is that a company so vital to America’s AI-military complex is too big to subject to ordinary laws.

In the everyday world, a CEO who gets into both a sex scandal and a national-security imbroglio wouldn’t stay CEO for more than a minute. At Nvidia, the board has moved with incredible sloth. It declared on Sunday that it “has no reason to believe that either national security or Nvidia secrets were compromised” – before any independent investigation. It finally met on Wednesday evening after further revelations of a separate extramarital affair with an Nvidia executive. Huang’s fate now reportedly hangs in the balance, but the company board, it may surprise you to know, includes several of his longstanding business associates. You’ll also be gobsmacked to learn that several members of his family are serving in senior positions at Nvidia.

One of the protections for Huang, like Musk and Zuckerberg and Altman, is that there appears to be no succession plan in place should any of those men fall under a self-driving automobile. A suggestion doing the rounds is that the father may now be replaced by one of his children. The Vatican has a more codified succession process for the pope, even if it includes white smoke and Ralph Fiennes.

This scandal is different from the allegations over David Walliams or the convictions handed down against Russell Brand – but one black thread that connects them is the grace afforded to each man by enablers and the powerful. Asked about the Huang affair, Trump described him as a “fine person”. Many of us will remember Trump defending the white nationalists who stormed Charlottesville in 2017. They were “some very fine people”, he said.

This is the very same sense of impunity that drove so many Americans out last week to protest against Trump, datacentres and AI. At the midterms, the Democrats rode a wave of populism: the many v the money. Nearly two decades after the banking crash, the public anger against an unaccountable, ruinous elite is finally finding a political vehicle. Yet it still lacks the policies to match.

What do even the brightest minds in the Democratic party, or Labour for that matter, want to do about the tech billionaires? A moratorium on datacentres, certainly. A wealth tax, maybe. Given the largeness of the moment, the scale of popular anger, these are tiny measures. What about breaking up private monopolies such as Nvidia and socialising AI? How about combining that with a refoundation of welfare and other essentials of everyday life?

The tech bubble hasn’t burst, but this week we got a small taste of how it might end. When America’s AI bets do collapse, that will be a financial failure, an economic failure and a political failure. Given the strategic importance of these companies and their technologies, there will be demands for huge bailouts. The left should start preparing its own response. Through diffidence and a lack of preparation, it squandered the crisis of 2008; it mustn’t this time. To do so would not be, well, smart.

Aditya Chakrabortty is a Guardian columnist