Good morning. Today, Fortune focuses on the following topics:
- NVIDIA's suspicious statements regarding the relationship between Megaspeed executives and Jensen Huang
- AI The company has $3.2 trillion in off-balance-sheet commitments.
- Market: Demonstrating Resilience in the Face of Controversy
- The probability of the Federal Reserve raising interest rates in December is 80%.
- AI The investment boom is about to surpass the Internet bubble
- Canva Cuts 1,200 Jobs, Yet the Internet Seems to Like It
Headline News
NVIDIA has launched an investigation into the relationship between Jensen Huang and a woman alleged to be a Chinese spy, which may lead to a review of CEO and several other suspicious statements made by the company.
NVIDIA's board of directors stated on Sunday that it will conduct an "independent investigation" into the relationship between CEO Jensen Huang, Megaspeed, and executive Alice Huang (who are not related by blood). Alice Huang is suspected of being a Chinese spy.
The most challenging part of this investigation may lie in examining the various suspicious statements made by Jensen Huang and his company regarding this matter since 2025. At that time, journalists began to inquire about the relationship between Megaspeed and NVIDIA.
In October 2025, The New York Times reported that Jensen Huang and Alice Huang were photographed together drinking at an industry event in 2024. A NVIDIA spokesperson stated at the time that there was nothing inappropriate about this meeting: “When Jensen Huang is available, [customers] might invite him to come by to provide market updates.”
In December 2025, Bloomberg reported that the U.S. government was investigating Megaspeed and whether the company had violated export bans by illegally transporting NVIDIA chips to China. NVIDIA denied any issues with its relationship with Megaspeed and stated that Megaspeed was "cloud services provided in accordance with export control regulations."
In October 2026, Jensen Huang made another public statement.
On October 29, NVIDIA stated regarding CNBC, that the accusations of circumventing export controls were unfounded: "The allegations of transshipment targeting this regional cloud service provider were thoroughly investigated last year and proven to be false," said the spokesperson.
Jensen Huang has now admitted in an email sent to employees, “I was unfaithful to my wife.” This admission has raised potential concerns regarding national security, as Jensen Huang frequently interacts with President Trump. NVIDIA stated, “Although the board of directors has no reason to believe that national security or NVIDIA’s confidential information has been compromised, the board’s investigation will examine all available information.”
Click here to read the email sent by Jensen Huang to his employees.
Click here to read the statement from NVIDIA's Board of Directors.
Jensen Huang’s children are also part of his team. - WSJ
Pending resolution
AI Company has $3.2 trillion in off-balance-sheet commitments, which may (or may not!) impact the market.
Tech stocks tended to stabilize last Friday, but the Nasdaq still fell by 10.18% over the past 30 days. Some on Wall Street are concerned that there may be more room for decline in the future.
"There are still some unresolved issues, including the leverage level, which is now as high as during the telecom boom in the internet bubble. This makes us cautious about AI infrastructure transactions. We expect the market to continue to be volatile," Wells Fargo's Ohsung Kwon said in a report last week.
How large is the leverage?
At credit rating agencies KBRA, Doug Colandrea and Andrew Giudici, efforts were made to estimate the scale by examining commitments such as data center leases and chip purchases that large AI spenders had not yet recorded on their balance sheets. They estimated that as of the end of the second quarter, the off-balance-sheet commitments of these hyperscale cloud service providers amounted to approximately $3.2 trillion.
Of course, since these commitments are off-balance-sheet items, it is inherently more difficult for investors to assess their quality. KBRA told Fortune: "These off-balance-sheet debts may pose financial risks, and the existing debt data may not fully reflect them. Since these companies have already committed to considerable future expenditures, it will be even more difficult for them to change direction in the future."
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- "AI Rebound": Nearly 20% of American employees who have been replaced by AI are now being asked to return to work – but they demand higher salaries, job security, and more AI transparency - Joshua Hong
Market
Tech stocks are expected to shake off the impact of the NVIDIA controversy.
Last week was terrible for the S&P 500 index, which fell 4.3% from its high point to its low point, but there was a slight rebound on Friday. This week looks more promising.
Before the opening in New York, the NASDAQ 100 index futures rose by 0.2% this morning. Previously, the index had tumbled 1% due to news that NVIDIA was investigating its relationship with a woman suspected of being a Chinese intelligence asset. Apart from this, traders did not seem to be too concerned about this controversy. As markets in Asia and Europe generally rose, U.S. stock index futures also moved higher.
S&P 500 index futures rose 0.39% this morning. The index gained 0.31% on Friday.
In Europe, the Stoxx 600 index rose by 0.64% in the early session, while the UK FTSE 100 index gained 0.57% before noon.
In Asia, the South Korean KOSPI index rose by 0.81%, Japan's Nikkei 225 index increased by 2.33%, India's Nifty 50 index rose by 0.23%, and China's CSI 300 index increased by 0.05%.
Brent crude oil is priced at $97 per barrel.
Bitcoin fell to $74,074.
A very necessary piece of common sense
"Despite the market turmoil this week, the total market value of the U.S. stock market has still increased by $5 trillion since the beginning of the year, as shown in the figure below." —— Apollo Global Management's Torsten Sl øk
The Fed won't let the volatile stock market prevent a rate hike in December
Friday's employment report: The United States added 165,000 non-farm jobs in October, far exceeding expectations, and almost certainly ensures that the Federal Reserve will raise interest rates again in December. If the labor market does not need the Federal Reserve's help, then the Fed will focus more on fighting inflation.
CME FedWatch Futures indices show that the probability of the benchmark interest rate being raised to 4% is 80%. Before the employment data is released, it seems more likely to be a 50-50 split. James Knightley stated in an email that a strong labor market "undoubtedly strengthens the case for the Fed to raise rates in December; in the previous few days, this expectation had declined, once approaching a 50:50 split."
If Samuel Tombs is of any reference value in the chart created by Pantheon Macroeconomics, then the Federal Reserve probably wouldn't worry about shaking the stock market (traders don't like interest rate hikes, as they make new rounds of funding more expensive). The chart shows that large-scale selling often indicates serious job losses. Tombs stated via email: "The S&P 500 index has fallen 5% from its current high, but that's not enough to indicate a decline in overall wages and employment."
Today's Chart
AI Investment is about to exceed the Internet bubble era
The Liz Everett Krisberg and David Tinsley from the Bank of America Research Institute indicate: 'The current AI investment boom has surpassed the corresponding phases of the oil boom in the 1970s and the shale oil boom in the 2010s, with only the technology cycle of the 1990s still ahead of us.'
Today's front page
- Apple saves $2.7 billion in taxes by booking profits in Singapore - FT
- From supermarket freezers to passenger flights, a wave of threats is testing Europe's defense capabilities - CNBC
- Republicans see Florida's "Crocodile Man" as a target for 2028 - Axios
- Five key points from Trump's interview on "60 Minutes" - WSJ
- NVIDIA's data center vision drives the competition to reinvent power transformers - Bloomberg
- Trump said asking Dana White to be the press secretary "was just a joke" - NYT
- Biden updates his cancer status before the release of his memoirs - NY Post
Let me mention one more thing.
Canva Cuts 1,200 Jobs; The Layoff Plan Is So Generous That Even the Internet Is Applauding
Most layoffs announcements trigger anger, but this time, Canva received applause instead. The co-founder and CEO Melanie Perkins announced that a reorganization would affect 1,271 employees, which accounts for 22% of the total staff at this design firm based in Sydney. The explanation she sent to her employees was also posted on LinkedIn and quickly became a case study online about how to carry out layoffs, mainly due to the benefits offered to the departing employees by Canva.
Leaving employees will receive at least six months' salary, and this includes statutory benefits regardless of their location. In addition, in countries where Canva has provided relevant welfare, employees will also receive 12 months of continuous medical coverage. Other benefits include career transition support, which includes one-on-one coaching, interview preparation, and a year of LinkedIn Premium. Employees who leave the company can also take their own MacBook with them, and Canva has also abolished the one-year cliff clause for employees who joined in the past year.
And that's not all. Eligible departing employees can apply for a grant of $10,000 to pursue an idea, start a business, or launch a project, and Canva will not claim any equity or ownership in the results they create.
