Nvidia shares fell roughly 5% in premarket trading on Monday after the company announced an independent board investigation into CEO Jensen Huang over his ties to a businesswoman whom intelligence agencies say is a Chinese spy.
The board’s inquiry examines whether Huang was the target of a foreign intelligence effort involving Alice Huang, who ran a Singapore-based company. That company purchased nearly $5 billion in Nvidia chip technology. U.S. authorities investigated allegations that she helped divert advanced AI chips to China.
Nvidia stock dropped 4.4% in premarket trading after closing at $186.64 on November 6. Perpetual futures on Hyperliquid and after-hours trading on Blue Ocean fell about 5.6% to $176.13.
While the Board has no reason to believe that either national security or NVIDIA secrets were compromised, the Board’s inquiry will examine all available information,
Nvidia Board of Directors
The company sits at a market capitalization of approximately $4.5 trillion, representing nearly 7% of the S&P 500. U.S. export controls since 2022 have sought to restrict China’s access to advanced Nvidia chips and the equipment needed to make them.
Nvidia leadership under scrutiny has intensified as investors question whether Huang will remain as chief executive.
According to Dan Ives, partner and senior managing director at Yorkville Ives & Co., the situation presents a black-eye moment for the executive and introduces key-person risk, given that Huang co-founded Nvidia in 1993 and has led it for more than three decades with no named successor. Gary Black expects portfolio managers to reduce their Nvidia exposure due to uncertainty surrounding potential succession.
In a message sent to employees on Sunday, Huang acknowledged an affair and took responsibility for his actions.
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,
Jensen Huang, CEO of Nvidia
Huang stated that he fully supports the independent review. I support the investigation and will cooperate fully,
he wrote in his memo to staff.
President Donald Trump addressed the allegations on Sunday, telling reporters that he considers Huang an honorable guy. Trump noted that he had not spoken directly to Huang about the matter.
I think he’s an honorable guy. I hope everything’s fine.
President Donald Trump
Meanwhile, China’s Foreign Ministry spokesperson Guo Jiakun dismissed the narrative on Monday as unsubstantiated. Nvidia is scheduled to report its third-quarter earnings on November 17 and will hold a major conference in Washington, D.C., at the end of the month.
Earlier coverage: Nvidia Board Launches Probe Into Jensen Huang's Relationship With Suspected Spy