How One of the World’s Richest Men Is Avoiding $8 Billion in Taxes
In 2012, Huang placed $7 million in Nvidia shares into an irrevocable trust, now valued at over $3 billion, reducing potential estate taxes from over $1 billion to mere hundreds of thousands. In 2016, Huang and his wife established four GRATs containing $100 million in Nvidia shares. With Nvidia’s meteoric rise as a leader in AI chip technology, these shares are now worth over $15 billion, potentially saving the family $6 billion in estate taxes.
Huang also leveraged a charitable foundation to donate Nvidia shares worth $330 million, reducing income taxes while directing 84% of these funds to a donor-advised fund (DAF). This DAF, called GeForce, faces no legal obligation to distribute funds to charities and can remain under family control, further reducing the family’s estate tax liability by about $800 million.
Despite efforts under previous administrations to close loopholes in GRATs and trusts, political resistance has left these strategies available. The cumulative effect of such maneuvers has hollowed out the estate tax, allowing billionaires like Huang to pass wealth to future generations with minimal tax burdens while depriving the government of significant revenue.
For more information see Jesse Drucker “How One of the World’s Richest Men Is Avoiding $8 Billion in Taxes” The New York Times, December 5, 2024.
Special thanks to Naomi Cahn (University of Virginia School of Law) for bringing this article to my attention.