The Jensen Huang scandal is casting a shadow over data centers halfway across the world

The Jensen Huang scandal is casting a shadow over data centers halfway across the world The Jensen Huang scandal could increase scrutiny of AI infrastructure companies in Southeast Asia, according to industry sources. Samsul Said/Bloomberg via Getty Images Jensen-Gate isn't just Nvidia's problem anymore. Data center operators across Southeast Asia might be getting caught in the fallout.In case you missed it, former Nvidia CEO Jensen Huang has had a rough week. On Sunday, The New York Times published an exposé that the executive had an affair with Singapore-based Chinese businesswoman Alice Huang, believed to be passing sensitive Nvidia information to Beijing.Alice Huang worked at Megaspeed, a Singapore-based data center company that is the largest Nvidia customer in Southeast Asia, per Bloomberg. US authorities have investigated the company on suspicion that it helped Chinese customers obtain advanced Nvidia AI chips in violation of US export restrictions.Huang resigned from his role on Thursday.Industry sources in data center financing and operations told Business Insider that Jensen-Gate could increase scrutiny on Southeast Asia's AI infrastructure companies.Jensengate could lead to increased oversightChris Miller, the author of "Chip War" and a professor at Tufts University, said to Yahoo Finance on Monday that it was widely known that Megaspeed was "primarily building data centers in Southeast Asia to serve Chinese customers, especially Alibaba in their case."He added that Megaspeed isn't alone, and that there are many data centers in Malaysia, Thailand, and Singapore that buy advanced American chips and sell them to customers in China.He expects these relationships to face more oversight from Washington after Huang's scandal.SEA AI infrastructure operations may get slower and more expensiveMore scrutiny means slower and more expensive processes. Lior Prosor, the managing partner of Deep33, an NYC-headquartered venture fund that invests in AI infrastructure, told Business Insider that the Huang affair would intensify scrutiny of American tech deployments in Southeast Asia, especially which customers' hands they end up in."That could increase financing costs and create additional hurdles for some operators," Prosor said.He said this could temporarily create a broader risk premium for Southeast Asian operators, even those with no connection to Megaspeed.Chinmoy Baruah, the CEO of Dublin-based semiconductor company ChipX, said he expects approvals for AI infrastructure projects in the region to take longer, as investors and partners will ask more detailed questions on compliance. ChipX has committed to building wafer fabrication plants in Malaysia."That may slow some projects at the margin, particularly those with less transparent structures," Baruah told Business Insider.Michael Heinrich, the CEO of Singapore-based decentralized AI compute company 0G, said he could see fundraising for AI infrastructure get more selective over the next year."The next round of capital will go to the operators who can prove where their chips are, who uses them, and who owns the business," Heinrich said.Bitter medicine, but better long-term healthThe Huang scandal won't have a lasting impact on demand for Southeast Asian AI infrastructure, but rather on the standards for it, said Baruah.He said the region's fundamentals — growing digital economies, supportive governments, improving connectivity, and rising AI adoption — remain strong. This incident, however, will make rules clearer and increase diligence among operators, chip suppliers, and regulators."That is a positive outcome for Southeast Asia, because it strengthens the region's position as a reliable, long-term destination for global digital infrastructure investment, not a shortcut around the rules," Baruah said.Prosor from Deep33 added that AI compute is in "extraordinarily short supply, and capital will flow to wherever companies can reliably build up compute."Southeast Asia remains an important part of that equation," he said.Southeast Asia's data center boomThe Huang scandal comes as the data center industry in Southeast Asia is booming.Ember Energy, a London-headquartered energy think tank, wrote in a 2025 report that ASEAN — a bloc of 11 member states in Southeast Asia — was emerging as a "global data center hot spot" due to lower construction costs and electricity levies.Malaysia, for instance, had live data center operations totaling about 1.3 gigawatts in June, which was a tenfold increase from 2022, per a report by BloombergNEF, a think tank under Bloomberg. It has another 4.7 gigawatts planned or under construction, the report added.Indonesia had about 450 megawatts of live data-center capacity as of June, with more than four times that amount currently under construction or committed, per the BloombergNEF report.A rough week for NvidiaHuang's resignation comes after a tumultuous few days for Nvidia.Its stock took a hit after the US midterm elections on November 3, which flipped control of Congress to the Democrats, many of whom had made anti-data-center messaging a major part of their campaigns.A few days after reports on Huang's affair, on Wednesday, the Times published another report that said Huang had had a second extramarital relationship, this time with Nvidia's vice president of healthcare, Kimberly Powell. The Wall Street Journal wrote on Wednesday that Nvidia's board was preparing to oust Huang.Early Thursday morning, Nvidia announced that Huang had resigned from the role, and CFO Colette Kress would take over as interim CEO. Read next Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Aditi is a news reporter at Business Insider’s Singapore bureau. She covers hustle culture and the future of work, focusing on how AI and technology are reshaping jobs, careers, and workplaces.She previously worked for The Straits Times, where she wrote breaking news stories for the Singapore desk. She studied communications and business at Nanyang Technological University. Data Centers