Nvidia shares fell sharply on Monday after the chipmaker’s board announced an independent investigation into whether chief executive Jensen Huang had been targeted by a foreign intelligence effort.
The internal probe, announced on Sunday, followed a media report that Huang had a close relationship with a Chinese businesswoman who allegedly passed information to Beijing, according to Reuters. Huang told Nvidia employees that he had been unfaithful to his wife, without disclosing details of the relationship.
Nvidia shares fell just over 4 percent in pre-market trading, according to Reuters, and were down about 5.6 percent in after-hours trading, at around $176, against Friday’s Nasdaq closing price of $186.64, according to other reports. In Frankfurt trading, the shares tumbled more than 6 percent, extending last week’s selloff.
A $270 billion question
At the Frankfurt levels, the chipmaker stood to lose about $270 billion from its closing price on Friday, according to LSEG Datastream, as reported by Reuters. The investigation has put a spotlight on Huang’s future, given Nvidia’s status as the world’s most valuable chipmaker and his role as the most prolific salesman of the AI boom.
The board said a committee of independent directors, assisted by outside independent counsel, would oversee the investigation. It said it had no reason to believe that U.S. national security or Nvidia’s confidential information had been compromised, and reaffirmed its confidence in Huang.
The controversy follows a New York Times report last month that Huang had a relationship with Alice Huang, an unrelated former executive of Singapore-based Megaspeed, a company that buys Nvidia chips. U.S. authorities investigated Alice Huang and concluded she was a Chinese intelligence asset, according to the Times report cited by Reuters. The US memo claiming China recruited a Megaspeed executive to spy on Nvidia was reported earlier.
Huang supports the investigation and has committed to cooperating fully, according to reports. No finding of espionage or wrongdoing involving company secrets has been announced.
Suppliers rebound as Nvidia falls
Shares in Nvidia’s key Asian chip suppliers rebounded on Monday after last week’s selloff of AI-related stocks. TSMC shares jumped 6.5 percent, while Samsung Electronics and SK Hynix climbed 2.9 percent and 4.7 percent respectively, according to Reuters.
Republican lawmakers have requested a private briefing on 18 November about Nvidia’s safeguards and the reported relationship, according to reports. Nvidia’s results are scheduled for 17 November, when investors will scrutinise orders from major cloud customers and whether AI infrastructure spending can sustain its pace.
The probe adds governance uncertainty to a stock already under pressure from the wider AI selloff. It is a genuinely new development from the Megaspeed memo reported last week: the board has now opened a formal independent inquiry, and the market is pricing in the risk that it finds more.
