Nvidia Shares Slide as Board Probes CEO Huang's Ties to Alleged Spy

Nvidia's board has opened an independent investigation into CEO Jensen Huang after a New York Times report said he had a close relationship with a Chinese businesswoman whom U.S. intelligence officials believed was a spy for Beijing. Nvidia shares fell sharply on Monday as investors weighed what the probe could mean for the company and its chip sales to China.

Huang admitted on Sunday that he was unfaithful to his wife. China denies the spying allegations, and Nvidia says it has no reason to believe national security or company secrets were compromised.

What is Nvidia's board investigating?

According to Fox Business, the review will be overseen by outside independent counsel and a committee of independent directors. The board said it would examine all available information. It also said Huang supports the review and has promised to cooperate, and that the directors have confidence in him and his leadership team.

CBS News reported that the company did not respond when asked whether Huang had violated any corporate policies.

Who is Alice Huang?

Alice Huang, also known as Huang Le, is not related to Jensen Huang, the BBC reported. She was an executive at Megaspeed, a Singapore-based data center company, from March to November 2023. The New York Times reported that U.S. officials believed China's top intelligence agency had recruited her. Her current whereabouts are unknown.

Megaspeed had been suspected of helping divert Nvidia chips to China. According to the BBC, Nvidia maintains that concern was investigated and debunked, but the BBC understands Singapore's government is investigating earlier allegations that the company got around U.S. export sanctions. It remains unclear what information, if any, she passed to Beijing. She did not respond to the Times' request for comment.

What have Huang, Nvidia, Beijing and Trump said?

In a statement, Huang apologized for hurting his wife and children, saying there was no excuse for his actions. He did not elaborate on the relationship. He also said he is committed to protecting Nvidia and supporting U.S. national security.

An Nvidia spokesperson told the BBC and CBS News the company would expect the U.S. government to have warned it of a genuine threat. Nvidia told the BBC it was not aware of any intelligence concerns. The company also said Huang is committed to continuing to lead it.

China's Foreign Ministry spokesperson Guo Jiakun called the allegations baseless and a smear against China.

President Donald Trump said on Sunday that he considers Huang an honorable man and does not think he should have acted on the intelligence. The New York Times reported that Trump was briefed on it last year. Secretary of State Marco Rubio declined to comment, though the Times reported he oversaw a memo last spring warning the administration about the relationship.

How did the stock react?

CBS News reported that Nvidia shares dropped 4.3%, or $7.97, to $178.67 on Monday, erasing about $193 billion in market value. The company is the world's second-most valuable, with a $4.5 trillion valuation. Fox Business later reported a deeper decline, with shares down more than 5% and nearly 6% around noon.

The stock was already under pressure. CBS said it had fallen almost 20% over the past month during a broader sell-off in AI shares.

Why does it matter?

Nvidia sits at the center of the U.S.-China race over artificial intelligence, the BBC noted. Since 2022, Washington has used export controls to keep top chip technology out of China. Huang once said Nvidia's share of the Chinese market had fallen from around 95% to effectively zero, and he has lobbied for a way back in. CBS reported he won Trump's approval this year to sell the H200 chips, which are not Nvidia's most advanced.

For investors and Nvidia shareholders, analysts quoted by CBS pointed to leadership risk. Daniel Newman of Futurum said there is no known succession plan and called Huang the company's equivalent of Steve Jobs. Huang is also Nvidia's fifth-largest shareholder, holding about 3.4% of shares, according to FactSet.

Analyst Adam Crisafulli of Vital Knowledge said the probe could raise the risk of tougher U.S. restrictions on chip exports to China. Dan Ives of Yorkville Ives called it a "black eye moment" and predicted congressional inquiries.

What happens next?

The board's review is just beginning, and no timetable was given. Analysts told CBS that key questions include whether Huang knew of any espionage and whether sensitive information was compromised. Asked whether Huang would join an upcoming trip to Asia, Trump said he did not know but would certainly take him, according to Fox Business. Megaspeed and Singapore's Ministry of Home Affairs had not responded to CBS requests for comment on Monday.

Read next
U.S. Photo Shows China's Reusable Space Plane Joined to a Mystery Craft
US Presses China on Busan Deal as Trade Truce Runs to Jan. 10
Why Chinese Brands Dropped Mbappé Over a Meme About Mao

Around Prague, based on reporting by BBC News, CBS News, Fox Business