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Shares in “Nvidia” fell about 6% on Monday after the chipmaker said it would investigate reports that its chief executive, Jensen Huang, had been targeted in a foreign intelligence effort. The company’s market value dropped by about $250bn (£190bn), according to the BBC.
Huang acknowledged having an extramarital affair and said he had been “unfaithful” to his wife. He apologised for hurting her and their children, and said he was “committed to protecting Nvidia and supporting America’s national security” and would cooperate with the investigation.
The board said the investigation would begin “in light of recent reporting that founder and chief executive Jensen Huang has been the target of a foreign intelligence effort”. “Nvidia” said it had no reason to believe its secrets or national security had been compromised.
US intelligence officials believe Alice Huang, also known as Huang Le, was a spy for Beijing, The New York Times reported. According to the report, Secretary of State Marco Rubio sent a memo to senior officials in Washington last spring warning that the Nvidia chief was in a close relationship with a Chinese spy.
Alice Huang was managing director of Singapore-based “Megaspeed”, which has had dealings with “Nvidia”. China’s Foreign Ministry rejected the allegations, calling them “entirely groundless, speculative and intended to smear and malign China”.
Investors assess Huang’s position
After the investigation was announced, several technology executives, including Elon Musk, backed Huang remaining at the helm. US President Donald Trump described him as an “honourable guy”.
Despite the drop in “Nvidia” shares, the US stock market opened higher on Monday after last week’s volatility, while rival chipmakers gained. Analysts said the impact on “Nvidia” could be short-lived.
Victoria Fernandez, chief market strategist at “Crossmark Global Investments”, told the BBC investors would not abandon “Nvidia” because of its central role in the artificial intelligence industry. “Nvidia is the core of this AI trade, and without them, all these other pieces start to fall apart because the financing’s not there,” she said.
Huang co-founded “Nvidia” with two other engineers in 1993. The company’s chips were initially designed for gaming, but Huang shifted its focus towards AI development, helping it become the world’s second most valuable company.
Fernandez said there was “no natural successor” to Huang. Unlike some other technology founders, he could be removed by the board: he owns about 3.5% of “Nvidia”, whose single-class voting structure means his stake would not give him veto power over a board decision.
By contrast, some founders who lead their companies, including Mark Zuckerberg of “Meta” and Musk of “Tesla” and “SpaceX”, hold significant percentages of multiple types of stock. Fernandez said she did not expect the board to remove Huang unless there was clear evidence of wrongdoing related to national security or intellectual property. She added that the board might begin preparing a second-in-command for the future.
The relatively modest share-price decline suggests investors consider it unlikely that Huang will resign or be removed, but the investigation’s outcome will be closely watched. People who do not directly own “Nvidia” shares may also be affected if pensions or savings are invested in index-tracking funds that hold the stock.
US-China competition over AI chips
“Nvidia” chips are a major focus of the AI competition between the US and China. The White House has previously restricted where the company can sell its advanced products.
Washington had restricted sales of the “H200”, “Nvidia”’s second most advanced semiconductor, over concerns that it could give China’s technology industry an advantage over the US. Huang has opposed limiting chip sales to China, arguing that US technology should power the global spread of AI.
In January, the Trump administration said “Nvidia” would be allowed to sell “H200” chips to Chinese customers under certain conditions.
Additional reporting by Samira Hussain, North America business correspondent.
