The AI industry is still reeling from Nvidia CEO Jensen Huang’s honeypot scandal, but some in the industry see it as a much bigger problem than just one man.
The Chinese government has been active in economic espionage for decades, and with semiconductors at the center of the AI boom, there is intense pressure to infiltrate any company involved. At the same time, many of the leaders who got rich from the boom have become easy targets.
As CEO of investment firm Heron Intelligence, Nate Singer has a unique perspective on the problem. His firm works on corporate due diligence: essentially making sure companies know relevant information before making a major acquisition or hiring executives. And while the Nvidia case is particularly serious, Singer says there are many similar cases in the semiconductor industry that have gone unnoticed.
“We have former employees speaking out about the behavior of senior management,” Singer told TechCrunch, saying that executives are “really crossing lines that shouldn’t be crossed.”
In a widely circulated article on LinkedIn, Singer detailed an instance in which a CEO’s wife made an unexpected appearance in a boardroom, “yelling about her husband and another corporate executive flying on the corporate jet with a few young women (who also turned out to be state-sponsored actors).”
It’s an alarming story, but unfortunately a common one. Singer says he has seen at least three reports of similar cases and suspects many more have gone unreported.
“There’s a lot more to it 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 lawsuits over similar cases in recent years, including a case involving manufacturing powerhouse TSMC in 2007.
In 2017, four executives of an unnamed “Bay Area semiconductor equipment maker” were charged with stealing trade secrets for use by a competing company in China. According to the indictment, the technology in question “was related to the mass manufacturing of semiconductor wafers for use in lighting and electronic devices, such as flat-panel televisions and smartphones.”
The sexual elements in such cases are rarely made public, in part because of the serious consequences for the executives and their companies. But according to Singer, the ongoing threat has become something of an open secret in the industry.
“Many senior industry leaders know this is happening and indeed condone it,” he told TechCrunch.
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