In a recent report by The New York Times, Nvidia’s CEO, Jensen Huang, has been highlighted for employing sophisticated legal strategies to avoid paying nearly $8 billion in estate taxes, making his family the primary beneficiaries of this tax maneuver. Huang, who is the 10th richest person in the United States with a net worth of approximately $127 billion, has utilized a series of well-known tax avoidance techniques that are reportedly common among the ultra-wealthy.

The tax strategies in question involve the use of irrevocable trusts and grantor-retained annuity trusts (GRATs). In 2012, Huang transferred 584,000 Nvidia shares into an irrevocable trust, a move which, under the “I Dig It” strategy, allows assets to appreciate without being subject to estate or gift taxes. By 2023, these shares had ballooned in value to over $3 billion, potentially saving his heirs from a tax bill of over $1 billion. Similarly, in 2016, Huang and his wife, Lori, set up GRATs, which further reduce estate tax liabilities by allowing asset appreciation to pass to beneficiaries free of such taxes. The shares in these trusts, initially worth $100 million, are now valued at over $15 billion, positioning the Huang family to avoid an estimated $6 billion in estate taxes.
This tax planning has drawn attention not just because of the sheer amount of money involved but also because it exemplifies how the estate tax, which is meant to curb inherited wealth, has been significantly undermined. The estate tax, which theoretically should claim 40% of Huang’s fortune upon his death, has seen its revenue stagnate since 2000, even as the wealth of America’s richest has quadrupled. If the estate tax had kept pace with this wealth increase, the U.S. government could have collected approximately $120 billion last year, instead of a mere fraction of that amount.
The rules say that the foundation has to give 5% to charitable causes every year – but when the donor dies, all funds can pass to heirs without any estate taxes.

The NYT’s investigation reveals that such tax avoidance tactics are not unique to Huang but are widespread among billionaire executives, including those at Blackstone, Meta, Google, and others, who have moved billions into similar financial vehicles. This has raised questions about the fairness of tax policy and the effectiveness of the IRS in enforcing estate tax laws, especially as IRS audits on estate tax returns have dwindled over the years.
Critically, no laws appear to have been broken by Huang, as these strategies exploit legal loopholes designed within the U.S. tax code. The public discourse following this report has been polarized. Some argue it’s a testament to the ingenuity of tax planning, while others view it as evidence of systemic flaws in tax legislation that disproportionately benefit the rich, leaving ordinary taxpayers to shoulder more of the fiscal burden.

The discussion around Jensen Huang’s tax strategies also ties into broader debates about wealth distribution, tax policy reform, and the moral obligations of the ultra-wealthy. Critics suggest that without significant changes to tax laws, these loopholes will continue to be exploited, potentially at the expense of public services that rely on tax revenues. Proponents of Huang’s approach, however, might argue that until the law changes, such tax planning is simply good business practice.
This story isn’t just about one CEO and his fortune; it’s a broader commentary on how the wealthiest in society navigate the tax system, potentially influencing public policy and societal investment in the process.
Sources: The above article draws from:
https://www.nytimes.com/2024/12/05/business/nvidia-jensen-huang-estate-taxes.html