Nvidia lost more than $400 billion in market value on Tuesday after chief executive Jensen Huang admitted to an affair with Alice Huang, a businesswoman suspected of spying for China.
The chipmaker's shares fell 5.5 percent to $168.80, their lowest level since March, bringing the total decline to roughly $1 trillion since the New York Times first reported the relationship. Huang, 63, acknowledged the affair in a memo to employees on Sunday.
Alice Huang, who is not related to the Nvidia chief, is a former executive at Megaspeed, a Singapore-based cloud-computing company that is Nvidia's largest chip customer in Southeast Asia. U.S. intelligence officials believe she was recruited by China's Ministry of State Security to gather intelligence on Nvidia and persuade Huang to lobby for chip exports. According to The Information, she used a network of companies including Shanghai Century Litong to deliver more than 240,000 H100, H200 and A100 processors worth at least $7.5 billion to China, circumventing U.S. export restrictions.
Nvidia's board has launched an independent investigation into whether Huang was targeted by Chinese intelligence, hiring the law firm Wachtell, Lipton, Rosen & Katz and former acting U.S. Attorney Joon H. Kim to lead it. The board expressed confidence in Huang's leadership and said it had no reason to believe national security secrets were compromised. The FBI is also investigating the matter, and shareholders have filed a class-action lawsuit accusing Nvidia and Huang of misleading investors about the relationship.
The affair has also drawn scrutiny to President Donald Trump, who was warned about the relationship in a classified memo drafted by Secretary of State Marco Rubio before a May trip to China. Rubio briefed Trump aboard Air Force One, but the president allowed Huang to join the delegation. Trump said on Monday that he did not recall the warning, adding: "Certainly, it didn't make much of an impact on me." He has defended Huang as "a very honorable man" but said the executive will not accompany him on his next China visit. A senior Republican on the Senate banking panel has called for Huang to resign, while Huang is scheduled to testify in closed session before a House committee on 18 November.
The Commerce Department, overseen by Secretary Howard Lutnick, had cleared around 10 Chinese companies to purchase Nvidia's H200 chips, with some approvals predating the warning about Alice Huang. Top Democrats on the House Foreign Affairs committee have demanded answers from Lutnick about the approvals, including to companies with concerning links to China.
