Nvidia Shares Slide as Internal Probe Into CEO Jensen Huang's Alleged Foreign Spy Ties Raises Succession Questions

On Monday morning, before U.S. markets had opened, Nvidia's stock was already sliding. Shares fell nearly five per cent in premarket trading, extending the previous week's sell-off and pushing the stock to fresh multi-month lows. At that level, the world's most valuable chipmaker would shed roughly $250 billion US from its last closing value.

The cause was an internal investigation the company announced on Sunday. It is examining whether CEO Jensen Huang was targeted by a foreign intelligence effort. The probe followed a media report that Huang had a close relationship with a Chinese businesswoman who allegedly passed information to Beijing. Huang told Nvidia's employees that he had been unfaithful to his wife, but he did not disclose details of the relationship.

The New York Times reported last month that the woman is Alice Huang, an unrelated former executive of the Singapore-based company Megaspeed. According to the Times, U.S. authorities investigated her and concluded she was a Chinese intelligence asset. She did not respond to the Times when it first reported the relationship, and Reuters could not determine where she is to seek comment on Monday. Megaspeed also did not immediately respond, though Monday was a public holiday in Singapore. In Beijing, Foreign Ministry spokesperson Guo Jiakun rejected the account, calling the so-called Chinese spy narrative a groundless accusation, slander and a smear.

The Times also reported that President Donald Trump was briefed on the intelligence findings roughly a year ago and chose to do nothing with them. On Sunday, Trump said he had not spoken to Huang about the allegations but called him a fine person. Asked whether he should have acted when briefed, he said no, describing Huang as an honourable guy who probably has an excuse that deserves to be heard.

The stakes are unusually high because of who Huang is. He is the most prolific salesman of the AI boom, with rock star status worldwide, especially in Asia, where he mingles with fans, takes selfies and signs autographs. He is also Nvidia's fifth-largest shareholder with a roughly 3.6 per cent stake, according to LSEG data. He runs the company through an unusually flat structure in which dozens of executives report directly to him. Unlike Meta Platforms or SpaceX, Nvidia has no dual-class shares giving its co-founder majority voting control. Nvidia said its board has confidence in Huang, though some analysts note he has no natural successor inside the company.

Chris Weston, head of research at Pepperstone in Melbourne, said the market was signalling that the episode does the stock no favours while there is already a lot of conjecture about the data centre build-out. He did not think Huang, whom he called the godfather of AI, would be replaced. If investors believed he was about to step down, he said, the stock would suffer an absolute bloodbath.

Other prominent figures weighed in. Bill Ackman, founder of Pershing Square Capital Management, wrote on X that Huang is an incredible human, but that if this is more than an affair it is obviously a real problem. He said he hoped for a simple affair rather than a national security risk. Elon Musk replied "I agree" to a post from Sequoia partner Shaun Maguire, who said Huang did something incredibly dumb that was bad for America, but that he is irreplaceable for America's AI leadership.

The fallout reached South Korea. Madison Huang, Huang's daughter and an Nvidia executive, cancelled a planned Seoul visit, according to companies she was due to meet. She had been expected to visit the AI startup Rebellions and hold a question-and-answer session with Kakao Mobility. Rebellions said the events were cancelled because of unavoidable internal circumstances at Nvidia. Nvidia AI Day Seoul, a two-day event expected to draw about 2,000 participants, will go ahead as planned, according to South Korean media.

Asian suppliers were largely unaffected. TSMC closed 4.7 per cent higher, Samsung Electronics rose 0.6 per cent and SK Hynix 0.4 per cent, rebounding from last week's AI-stock sell-off. South Korea's deputy science minister said the government expects no disruption to contracted GPU deliveries. Analysts cautioned that a prolonged review could delay Nvidia's investment decisions or product launches. NH Investment & Securities analyst Ryu Young-ho said rivals such as AMD could draw more attention in the short term, but that Nvidia's products are hard to replace, and shipments to China could face further delays depending on how events develop.