The AI chip giant has launched an independent investigation into allegations that its CEO was targeted by a Chinese intelligence operation.
Shares of US artificial intelligence chip giant Nvidia fell around 5% in pre-market trading on Monday, November 9, after the company announced an independent investigation into reports that its founder and chief executive, Jensen Huang, had been targeted by a suspected Chinese intelligence operation.
The controversy has shaken investor confidence in one of the world's most valuable companies, raising questions about corporate governance, national security and the future of its influential CEO.
The investigation follows media reports alleging that Huang had developed a close relationship with Chinese businesswoman Alice Huang, who was suspected of collecting intelligence for Beijing.
According to reports citing US intelligence assessments, Alice Huang had links to China's Ministry of State Security. She was previously associated with Singapore-based data centre company Megaspeed International, which has faced allegations concerning the movement of advanced Nvidia chips into China.
The espionage allegations remain unproven publicly, and the company's investigation has not established that confidential information was compromised.
Huang has acknowledged being unfaithful to his wife and apologised to his family and Nvidia employees.
In a communication to staff, he expressed regret over his conduct and reaffirmed his commitment to Nvidia. However, he did not publicly identify the woman involved.
The personal controversy has intensified scrutiny of Huang, whose leadership has been instrumental in Nvidia's transformation into a dominant supplier of AI computing hardware.
In an official statement issued on November 8, Nvidia confirmed that independent directors, supported by external legal advisers, would oversee the investigation.
The board said it currently had no reason to believe that US national security or Nvidia's confidential information had been compromised. It also expressed confidence in Huang's leadership and confirmed that he would cooperate with the inquiry.
Beijing strongly denied the allegations on Monday. Chinese Foreign Ministry spokesperson Guo Jiakun described the spying claims as groundless and an attempt to damage China's reputation.
The controversy comes amid continuing tensions between Washington and Beijing over semiconductor technology and restrictions on exports of advanced AI chips.
Nvidia has repeatedly sought greater access to the Chinese market despite US export restrictions intended to limit China's access to sophisticated computing technology.
Nvidia's shares declined approximately 4.5% in Frankfurt trading, while its US-listed shares fell around 5% before Wall Street opened.
The uncertainty comes at a sensitive time for the global technology sector following recent volatility in AI-related stocks. Analysts believe any prolonged investigation could create leadership uncertainty and increase regulatory scrutiny of Nvidia's Chinese operations.
Huang remains central to Nvidia's relationships with major technology customers, governments and investors. Although there is currently no confirmed indication that he will step down, the investigation could weigh on investor sentiment until its findings become clear.
For Nvidia, the immediate challenge is to reassure shareholders that the controversy will not disrupt its leadership, commercial operations or position in the rapidly expanding global AI industry.