Safeguarding our strategic technological assets, top priority

The Nvidia episode refuses to die down with the alleged spying by China on US’ top chip maker, making news on a daily basis. Things have now come to a place where several external shareholders and industry watchers have begun asking for resignation of Founder and CEO of Nvidia- Jensen Huang. If that happens, then it will be the biggest casualty to the US AI story so far.

As of now, the US has a distinct lead over rival China and even other nations with regard to AI innovations. From OpenAI, Anthropic to Meta, and Oracle; all technology giants have poured in billions into the AI space in order to grab the market share globally. Currently, US AI companies’ products and services dominate the global scene. Though China is a close second, still the US is leading. Such American dominance may come under cloud if Nvidia faces any kind of operational trouble.

So far, Nvidia chips have emerged as the game changer for the American AI industry. With superior technological features, the GPUs of Nvidia are powering the complex computing operations for American companies. That is also one of the reasons that America has imposed export restrictions on high-end chips.

Many of these chips are inaccessible for China, which is a geostrategic rival of the North American country. In this perspective, if Huang leaves Nvidia, it has to be seen how the company’s ability to innovate on the semiconductor space gets affected. In case of any adverse impact, the whole American AI industry will suffer.

This episode holds many lessons for India Inc. Many of Indian companies are highly promoter-driven with the founders making all the calls in the day-to-day operations of the firm. As several companies are family-owned and operated, any allegation against the promoter can shave off the market cap of the firm, in case it is listed.

Moreover, if professionals are not in charge, then operations of the firm are likely to be adversely affected. In that case, the firm’s financials, operations and its market standing are likely to suffer. Moreover, the Nvidia episode has again pushed the corporate governance issues to the fore. If the founder, chairman, CEO or any other top leader’s personal life get entangled with operations of the company then it is bound to affect its public value. This theme has played out time and again across the world and Nvidia is just a recent example.

As investors across many developed markets get nervous over the reputational risk that a firm faces due to top leadership’s personal action; they can dump the stocks. Therefore, personal and professional lives of top management should have distinct wall separating both. Because the Nvidia episode shows even the top company’s CEOs are not insulated from reputational risks.

In addition, the Nvidia incident seems to be a direct fallout of ongoing rivalry between the US & China. In order to grab the global market share in AI and take a lead, both nations are adopting all the methods of statecraft to create obstacles in each other’s growth. Against this backdrop, all nations should consider the possibility of sabotage seriously, especially in the technology sector. India is also pursing its own goal of becoming self-reliant in various technological sectors. Given the technology talent, India wants to be self-reliant on the AI space.

This can only happen, if all our strategic technological assets are protected well. This includes surveillance over all the assets of national importance on proactive basis to thwart nefarious plans of enemy nations.

ABOUT THE AUTHOR

The Hans India