Nvidia shares slumped as much as 6 per cent on Monday, wiping more than $200bn from the artificial intelligence giant’s market value, as an extraordinary scandal involving chief executive Jensen Huang and an alleged Chinese intelligence operation rattled investors.
The sell-off followed the company’s announcement that its board had launched an independent investigation into whether Huang had been targeted by a foreign intelligence effort.
The probe comes after reports that the billionaire executive had a close relationship with Alice Huang, a Chinese businesswoman suspected by US intelligence officials of passing information to Beijing.
Huang has admitted being unfaithful to his wife, apologising to his family and colleagues.
He has not publicly identified the woman involved in the affair, while the allegations that she worked for Chinese intelligence remain unproven.
In a message to Nvidia employees, he said: “I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.”
He also pledged to cooperate fully with the investigation, insisting: “I love our country and our company. I am committed to protecting Nvidia and supporting America’s national security. I am proud and grateful to be an American.”
The board said a committee of independent directors, supported by outside legal counsel, would oversee the inquiry. It stressed that it had “no reason to believe that either national security or Nvidia secrets were compromised” but said it would examine all available information.
The allegations have raised potentially serious questions for a company at the centre of the global AI boom. Nvidia’s advanced processors are crucial to the development of artificial intelligence systems, making its technology a strategic asset in the increasingly fraught contest between Washington and Beijing.
The reported relationship has attracted scrutiny because Alice Huang was associated with Singapore-based chip company Megaspeed, which has faced questions over suspected efforts to obtain advanced Nvidia processors for China. The precise nature of any information allegedly passed to Beijing, and whether Nvidia’s technology or commercial secrets were compromised, remain unclear.
Donald Trump sought to defend the executive, describing him as an “honourable guy” who had done an “amazing job” for the United States. Asked whether he had spoken to Huang about the allegations, the president replied: “I have not spoken to him about it. I just know he’s a fine person, but you never know what is going on.”
Trump also rejected suggestions he should have acted sooner after reportedly being briefed about the potential intelligence threat, saying: “I think he’s an honourable guy. I think he probably has an excuse for it.”
China has rejected the espionage allegations, describing them as “entirely groundless, speculative and intended to smear and malign China”.
For investors, the immediate concern is not simply the personal scandal but the uncertainty surrounding Nvidia’s leadership and the possibility of a national security controversy engulfing one of America’s most strategically important companies. Huang remains in his post and the board has expressed confidence in him, but the investigation leaves serious questions unanswered.
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