The AI industry is still reeling from Nvidia CEO Jensen Huang’s honeypot scandal, but some industry insiders see this as a much bigger problem than just one person.
The Chinese government has been ramping up economic espionage for decades, and with semiconductors at the center of the AI boom, there is intense pressure to infiltrate the companies involved. At the same time, many of the business owners who have become wealthy from the boom have found themselves easy targets.
Nate Singer, CEO of investment information firm Heron Intelligence, has a unique perspective on this issue. His company focuses on corporate due diligence. Essentially, it’s about ensuring that companies know the facts involved before making major acquisitions or executive hires. And while the Nvidia incident is particularly serious, Singer says there are many similar incidents that go unnoticed in the semiconductor industry.
Singer told TechCrunch that “former employees are discussing actions at the senior leadership level” and that executives are “actually crossing lines that shouldn’t be crossed.”
In a widely circulated LinkedIn post, Singer detailed an incident in which the CEO’s wife showed up unexpectedly in the boardroom and “yelled about her husband and another company executive flying around on a company jet with several young women (who also turned out to be actors receiving state aid).”
This is an alarming but unfortunately common story. Singer said he has seen at least three reports of similar incidents and suspects many more are going unreported.
“There are so many more women than just this one woman,” Singer said. “They are embedded in these companies.”
Semiconductor companies are already big targets for international trade secret theft. There have been dozens of similar indictments in recent years, including one involving manufacturing giant TSMC in 2006.
In 2017, four executives from an unnamed Bay Area semiconductor equipment manufacturer were indicted on charges of stealing trade secrets for use by competitors in China. The technology in question “was related to the mass production of semiconductor wafers used in lighting and electronic devices such as flat-screen televisions and smartphones,” according to the indictment.
The sexual element of such cases is rarely made public. One reason is that it has serious implications for executives and their companies. But Singer said the ongoing threat has become something of an open secret in the industry.
“There are a lot of senior people in the industry who know this is happening and are effectively condoning it,” he told TechCrunch.
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