Nvidia shares tumble after CEO's affair with alleged Chinese spy

Nvidia’s market value fell by roughly 4% on Monday after the company disclosed that it would launch an independent investigation into its chief executive, Jensen Huang, following reports that he had an extramarital affair with an alleged Chinese spy. The announcement erased about $250 billion from the chipmaker’s market capitalization, the largest single-day loss for a U.S. technology firm in recent history.

The investigation was prompted by U.S. intelligence officials who, according to a New York Times report, believed that Alice Huang, also known as Huang Le, was a spy for Beijing. Alice Huang was the managing director of Singapore-based Megaspeed, a company that has previously engaged with Nvidia. Secretary of State Marco Rubio reportedly warned Washington officials last spring that the Nvidia boss was in a close relationship with a Chinese spy. China’s foreign ministry dismissed the allegations as “entirely groundless, speculative and intended to smear and malign China.”

Nvidia said it had no reason to believe that the company’s secrets or national security were compromised. Nevertheless, the board of directors released a statement saying it would begin an investigation “in light of recent reporting that founder and chief executive Jensen Huang has been the target of a foreign intelligence effort.” Huang publicly admitted he had been “unfaithful” to his wife, apologized for the hurt caused to his family, and pledged to cooperate with the probe while reaffirming his commitment to protecting Nvidia and supporting America’s national security.

Members of the U.S. House Foreign Affairs Committee have called for a closed-door briefing of Huang next week. In a letter, Representatives Brian Mast, John Moolenaar and Rick Crawford warned that the reports “raise significant national security concerns regarding the PRC’s access to sensitive U.S. technology and information.” They urged Congress to determine the extent to which U.S. national security has been placed at risk.

Despite the market sell-off, several high-profile tech leaders, including Elon Musk, publicly supported Huang and urged that he remain at the helm. President Donald Trump described the Nvidia boss as an “honourable guy.” The news also lifted the shares of Nvidia’s rivals, as investors shifted focus to other chipmakers amid the turbulence.

Analysts predict the dip will be short-lived. Victoria Fernandez, chief market strategist at Crossmark Global Investments, argued that investors will not abandon Nvidia because the company is the core of the AI supply chain. She noted that without Nvidia, the financing and development of AI hardware would falter. Fernandez added that while the board is unlikely to remove Huang absent clear evidence of wrongdoing, it may appoint a deputy chief executive to prepare for future leadership transitions.

The incident highlights the vulnerability of founders who hold limited voting power. Huang owns roughly 3.5% of Nvidia and, under the company’s single-class voting structure, cannot veto board decisions. In contrast, founders like Mark Zuckerberg and Elon Musk hold significant percentages of multiple stock classes, giving them stronger control. The outcome of the investigation will be closely watched by investors, pension funds, and index-tracking vehicles that hold Nvidia shares, as any further erosion of confidence could ripple through broader markets.

Nvidia has long been at the center of the U.S.-China AI race. Its H200 chip, the company’s second-most advanced semiconductor, was previously restricted by Washington over concerns it could give China a technological edge. The Trump administration, however, allowed the sale of H200 chips to Chinese customers under certain conditions, reflecting Huang’s belief that global AI deployment benefits from U.S. technology. The current investigation may influence future export controls and the strategic positioning of U.S. chipmakers in the global market.