Nvidia shares fall 5% as board investigates CEO Jensen Huang over alleged Chinese spy relationship

Nvidia shares were down around 5% in premarket trading Monday after the company's board launched an independent investigation into CEO Jensen Huang's relationship with a businesswoman who U.S. intelligence agencies say is a Chinese spy.

Investigation and company response

Nvidia said its board opened an independent investigation following reports that Huang was the target of a "foreign intelligence effort." The investigation will be overseen by a committee of independent directors, assisted by external independent legal counsel.

In a statement, Nvidia said, "While the Board has no reason to believe that either national security or NVIDIA secrets were compromised, the Board's inquiry will examine all available information." The company added that the board prioritized U.S. national and economic security, which it said was paramount to Nvidia and its shareholders.

Huang, 63, will continue as Nvidia CEO during the investigation, the company clarified. The board also expressed confidence in Huang and his leadership team and said it would provide further updates as appropriate.

Huang's admission

Huang acknowledged having an extramarital relationship in a message to employees. He said, "I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry."

He also told staff, "My responsibility is to serve you and be worthy of your trust. I have fallen short of that responsibility. I am fully committed to Nvidia and will work to earn back your confidence."

Huang "fully supports the review and has committed to cooperating with it," the company said in a Sunday statement.

Stock movement

Nvidia was last trading down 5.2% in premarket trading, according to CNBC. The Economic Times reported that perpetual futures trading on the Hyperliquid exchange and after-hours shares trading on the Blue Ocean system showed Nvidia shares at around $180.30 on Monday, down approximately 3.4% from Friday's Nasdaq closing price of $186.64. Other trading venues later showed a decline of more than 5%.

Reactions

U.S. President Donald Trump praised Huang's leadership but said he had not spoken to the CEO about the investigation. "I think he's an honorable guy. I think he probably has an excuse for it. You have to hear it," the president told reporters. "He's done an amazing job for our country," Trump added.

Shaun Maguire, partner at Sequoia, said in a post on X that Huang is "one of the greatest entrepreneurs of this generation." He added, "two mistakes don't make a right, and I believe Jensen is irreplaceable for America's AI leadership." SpaceX and Tesla CEO Elon Musk reshared Maguire's post, adding that he agrees with the venture capitalist's statements.

China's Foreign Ministry spokesperson Guo Jiakun said on Monday the "so-called Chinese spy narrative" was unsubstantiated, Reuters reported.

Why it matters

The investigation could affect Nvidia's leadership, its chip sales to China, and its relationships with government officials. Huang is central to Nvidia's growth and its position in the global AI industry. The board's findings, along with any congressional action, will determine the wider implications for the company.

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Sources

• cnbc.com: Nvidia stock falls as scrutiny turns to Huang’s relationship with alleged Chinese spy
• m.economictimes.com: I was unfaithful to my wife: Nvidia CEO Jensen Huang admits secret affair with Chinese spy Alice Huang; all you need to know about the controversy - The Economic Times
• businessupturn.com: Nvidia stock falls 5% as CEO Jensen Huang admits affair amid foreign intelligence investigation · Business Upturn

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.