Nvidia shares fall about 6% Monday, erasing about $250bn as board opens inquiry

China rejects espionage claims; Nvidia cites no reason to suspect compromise

Nvidia shares fell about 6% on Monday, erasing about $250bn (£190bn) in market value after Jensen Huang admitted an extramarital affair and Nvidia’s board said it would open an independent investigation following reports that he had been targeted by a foreign intelligence effort. Nvidia said it had no reason to believe the company’s secrets or national security were compromised, while China’s foreign ministry rejected the espionage allegations as “entirely groundless, speculative and intended to smear and malign China.”

The sell-off was concentrated in Nvidia even as the US stock market opened positively on Monday after the previous week’s turmoil; Nvidia’s rival chipmakers benefited. The probe followed reports that the US believed Huang had been targeted in an espionage campaign by China, BBC News reported. BBC News also reported that analysts suggested the hit to Nvidia could be short-lived. Victoria Fernandez, chief market strategist at Crossmark Global Investments, said investors would not abandon Nvidia because the chipmaker was central to the AI industry. “Nvidia is the core of this AI trade, and without them, all these other pieces start to fall apart because the financing’s not there,” Fernandez told BBC News.

Nvidia’s board said it would begin the investigation “in light of recent reporting that founder and chief executive Jensen Huang has been the target of a foreign intelligence effort.” The board’s statement described the inquiry as independent. Huang acknowledged being “unfaithful” to his wife, apologized for hurting his wife and their children, and said he was “committed to protecting Nvidia and supporting America’s national security.” Huang said he would cooperate with the investigation.

Huang co-founded Nvidia in 1993 with two other engineers. Its chips were initially designed for gaming, but he shifted the company toward AI development, turning it into the world’s second most valuable company and a central hardware provider for emerging AI technologies. A key concern for investors was what would happen if Huang were removed; Fernandez said there was “no natural successor” to the chief executive.

Huang owns only around 3.5% of Nvidia, and the company operates under a single-class voting structure. His stake would not give him veto power over a board decision. The BBC contrasted his position with tech founders such as Mark Zuckerberg of Meta and Elon Musk of Tesla and SpaceX, who hold significant percentages of multiple types of stock in their companies. That left Huang vulnerable to a board move to oust him, according to the BBC.

Fernandez said she did not believe the board would remove Huang unless there was glaring evidence of wrongdoing related to national security or intellectual property, “but I bet they start bringing someone up as his number two, to have there for the future.” BBC News said the modest share-price decline suggested investors considered it unlikely that Huang would step down or be removed, though they would closely watch the investigation’s outcome.

BBC News, citing a New York Times report, said US intelligence officials believe Alice Huang, also known as Huang Le, was a spy for Beijing. Alice Huang was managing director of Singaporean company Megaspeed, which has had dealings with Nvidia. The report said Secretary of State Marco Rubio sent a memo to top officials in Washington last spring warning that the Nvidia chief was in a close relationship with a Chinese spy.

China’s foreign ministry rejected the allegations, calling them “entirely groundless, speculative and intended to smear and malign China.” Nvidia said it had no reason to believe the company’s secrets or national security were compromised.

After the investigation was announced, other big tech bosses, including Elon Musk, came out in support of Huang to continue leading Nvidia. US President Donald Trump called Huang an “honourable guy.”

People who did not own Nvidia shares directly could also be affected through pensions or savings invested in index-tracking funds with stakes in the company, the BBC said.

Nvidia’s chips have been a major focus of the AI race between the US and China, and the White House has previously imposed controls on where the company’s advanced products can be sold. The H200, Nvidia’s second-most-advanced semiconductor, had previously been restricted over concerns that it would give China’s technology industry an edge over the US. Huang opposed restricting Nvidia’s chip sales to China, arguing that the global rollout of AI would be better powered by US technology. In January, the Trump administration said it would allow Nvidia to sell H200 chips to Chinese customers under certain conditions.