Nvidia shares fall over 4% as Jensen Huang admits to affair with suspected Chinese spy; Trump says FBI probing matter

Nvidia shares fell more than 4% on Monday after reports that chief executive Jensen Huang may have been the target of a Chinese intelligence operation, raising questions over potential national security risks at the world’s most valuable semiconductor company.

The stock declined 4.27% during Monday’s session, hitting a seven-month low, as investors assessed the implications of the controversy and Nvidia’s decision to launch an independent investigation into its co-founder. The stock closed at $178.67 and wiped approximately $190 billion off its market capitalisation.

The sell-off came amid concerns that the allegations could have wider implications for the company’s business in China, particularly its ability to sell advanced artificial intelligence chips to the country. 

The controversy centres on Huang’s reported relationship with Alice Huang, a Chinese businesswoman and former executive at Singapore-based Megaspeed International. US intelligence officials reportedly believe she was an asset of China’s Ministry of State Security and had been gathering information for Beijing.

The allegations have raised concerns about whether sensitive information relating to Nvidia’s technology, business dealings and access to advanced chips could have been exposed. However, there is currently no established evidence that Nvidia’s trade secrets or US national security information were compromised.

Nvidia’s board announced on November 8 that it would initiate an independent investigation, overseen by a committee of independent directors and outside legal counsel. The company said it had no reason to believe that its secrets or national security had been compromised. Huang has agreed to cooperate with the investigation.

The developments have also drawn the attention of US President Donald Trump, who confirmed on Monday that the Federal Bureau of Investigation (FBI) was looking into the matter. Speaking at a White House briefing, Trump said he had spoken to Huang and asked him whether he knew that the woman was allegedly working for Chinese intelligence.

“I asked him that question, ‘Did you have any idea that she was a spy?’ He said, ‘I had no idea that she was a spy,’ and I really believe him,” Trump said.

“I know the FBI is looking into it, and I think that he’ll be in good shape,” he added. Trump also described Huang as an “honourable guy” and said he hoped to include the Nvidia chief on his upcoming trip to Asia.

The FBI inquiry is separate from Nvidia’s internal investigation. The controversy also intersects with an existing US government investigation into Megaspeed and suspected attempts to circumvent American export restrictions on advanced AI chips.

The US Department of Commerce’s Bureau of Industry and Security (BIS) had been examining the company’s suspected role in the movement of restricted Nvidia chips to China. The investigation was subsequently transferred to the Department of Justice (DOJ), following an intervention involving Nvidia’s legal leadership and Commerce Department officials, according to reporting on the matter.

China’s Foreign Ministry has rejected the espionage allegations, describing the claims as a smear. 

The controversy has also triggered legal action against Nvidia and Huang. An investor, Mark Kistenmacher, filed a proposed securities class-action lawsuit in a federal court in San Jose, California, on November 9, accusing the company and its chief executive of misleading shareholders by failing to disclose the alleged relationship and the associated national security concerns.

The lawsuit, represented by Rosen Law Firm, alleges that Nvidia’s earlier statements describing its dealings with Megaspeed as routine business relationships were misleading. It claims the disclosures exposed investors to risks involving the company’s reputation and future business prospects. Shareholders are seeking unspecified damages.

What Jensen Huang told Nvidia employees in his internal memo

Amid the growing controversy, Huang sent an email to Nvidia employees on November 8, acknowledging that he had been unfaithful to his wife and apologising to his family, colleagues, the company’s board, and shareholders.

In the message, titled ‘A message to our company’, Huang accepted responsibility for his actions but did not identify the woman or provide details of the relationship. “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 wrote.

Addressing employees, Huang said he had fallen short of his responsibilities as the company’s leader and needed to regain their confidence. “To my colleagues at NVIDIA, including those I have worked alongside for decades, and to our board, partners, and shareholders around the world: you deserve better from me,” he said.

He also addressed the national security concerns surrounding the allegations, confirming that he would cooperate with the board’s independent investigation. “I support the investigation and will cooperate fully. I love our country and our company, and I am committed to protecting NVIDIA and supporting America’s national security,” Huang wrote.

He concluded by asking employees and the public to respect his family’s privacy, saying that his family bore no responsibility for his choices.