Huang’s Nvidia scandal revives Buffett and Munger warnings

Buffett offered the line in a 2018 interview, saying Munger had identified three routes to ruin. He then clarified that Munger added the first two largely because they began with the same letter: “it’s leverage.” Posts repeating the saying circulated on X, including jokes that investors had expected AI to falter because of leverage but had not anticipated scandal involving women. The quote was also shared in Spanish.

The posts followed reports about Huang’s relationships. He admitted to being “unfaithful” to his wife after reports that he had an affair with a suspected Chinese spy. He resigned after fresh claims that he had an affair with a subordinate.

Users also circulated Buffett’s warning that a reputation built over 20 years can be ruined in five minutes. Buffett has delivered similar messages for decades: in 1991, as interim chairman of Salomon Brothers, he told employees he would be understanding if they lost money for the firm but ruthless if they damaged its reputation. He later told Berkshire subsidiary managers that the company could withstand financial losses, but not the loss of “even a shred” of its reputation. Buffett has also advised people not to do anything they would not want reported on the front page of their hometown newspaper.

Munger, Buffett’s right-hand man for more than 45 years, died at 99 in November 2023. Buffett, now 96, stepped down as Berkshire CEO at the end of last year and as chairman in September. Berkshire Class B shares have risen 13% in the past month to $590, near a record, while Nvidia shares have fallen 27%. Investors have soured on AI stocks amid concerns about overinvestment and fears of a regulatory crackdown.