Second Vice Minister Ryu Je-myeong of the Ministry of Science and ICT told a National Assembly budget committee on Nov. 9 that GPU deliveries to South Korea were expected to proceed without disruption despite the scandal involving Nvidia CEO Jensen Huang. Asked by Rep. Park Jeong-ha of the People Power Party about the potential impact, Ryu said, “We’ll have to watch how the situation and developments over the past few days affect things, but for now, we expect there to be no disruption to the schedule for securing the supply.” He added that the ministry was coordinating closely with Nvidia Korea on delivery schedules and said it would monitor the situation carefully.
The government said that GPU deliveries to South Korea would remain on track despite the scandal involving Nvidia CEO Jensen Huang.
Ryu added that the 10,000 GPUs secured through last year’s supplementary budget had already been brought into the country and were in use, while GPUs planned for purchase this year had been contracted and were being delivered.
The government secured 10,080 Nvidia B200 GPUs and 3,056 H200 GPUs through Naver Cloud, Kakao, and NHN Cloud, using 1.46 trillion won from last year’s first supplementary budget. About 10,456 of those GPUs are allocated for government use.
Since February, GPUs have been allocated to academic, industry, and research projects free of charge or at 5% to 10% of market prices. The government plans to purchase about 15,000 more GPUs this year, while around 9,000 GPUs will also be installed in its sixth supercomputer, scheduled to begin operating in June. The government’s goal is to acquire at least 52,000 advanced GPUs by 2028.
South Korea is a major Nvidia customer. In October last year, on the occasion of the APEC summit in Gyeongju, Nvidia agreed to supply 260,000 GPUs to the South Korean government and Samsung Electronics, SK, Hyundai Motor, and Naver. The government’s assurance that there would be no disruption to the schedule applies to the portion of that supply that has already been contracted.
U.S. intelligence agencies concluded that Alice Huang, an executive at Singaporean data center company Megaspeed, had a close relationship with Jensen Huang and had been passing information to Beijing. The two are not related. Nvidia said at the time that meeting with customer executives was part of a CEO’s job and nothing out of the ordinary. President Donald Trump defended Huang, saying, “Jensen is a great person. We have to protect him.”
The situation shifted within ten days. According to Bloomberg and other outlets, in a memo to employees on Nov. 8 (local time), Huang wrote, “I was unfaithful to my wife. My actions hurt my wife and children,” acknowledging his relationship with Alice Huang and apologizing to his family and the company. He also said he had “fallen short” in his responsibilities to the company.
That same day, Nvidia’s board announced that independent directors would conduct an independent investigation with the help of outside legal counsel. The board said there was “no reason to believe that national security or company secrets have been compromised,” and expressed confidence in Huang and the management team. Huang said he would cooperate with the investigation.
Members of both parties in the U.S. Congress called for an investigation. Megaspeed purchased about $2 billion worth of Nvidia GPUs last year and is under investigation by the U.S. Department of Justice over allegations that it diverted chips to China through intermediaries.
The market was shaken. Nvidia shares fell as much as 8.79% to $170.24 during trading on Nov. 9. Reuters estimated that the company’s market capitalization could decline by about $250 billion from the previous session, equivalent to roughly 346 trillion won. Huang owns 3.6% of Nvidia and oversees the company’s operations, but there is no clear succession plan. Nvidia is scheduled to report its third-quarter results on Nov. 17.