Nvidia Shares Slide as FBI Probes CEO Jensen Huang's Affair With Alleged Chinese Spy

Nvidia CEO Jensen Huang. Image via Wikimedia Commons.

Shares in Nvidia fell sharply on Monday after its chief executive, Jensen Huang, admitted to an extramarital affair and the company said it was investigating reports that he was the target of a foreign intelligence effort, according to CNN and the BBC.

What happened

• Nvidia shares fell as much as 8.8% shortly after Monday's opening bell, before paring some losses to end the day down roughly 4.3%, erasing about $192 billion from the company's market value, according to CNN.
• The stock is now down about 25% from its peak a month ago, and last week erased its gains for this year.
• Huang has acknowledged he had been intimate with a business executive, and issued an apology to his wife and to the company in an open letter posted on Nvidia's website.
• Nvidia announced on Sunday it was conducting an independent investigation into reports that Huang was the "target of a foreign intelligence effort".
• The New York Times reported that US intelligence had determined the woman, a Chinese citizen named Alice Huang, was gathering information for Beijing. She was a former executive of a Singapore-based data centre company called Megaspeed International, whose website prominently touts its partnership with Nvidia.
• US President Donald Trump said on Monday that the FBI was looking into the matter, adding that Huang had told him he had no idea the woman was a spy and that he believed the Nvidia chief would be "in good shape".

What the company and China say

Nvidia's board said it had "no reason to believe that either national security or NVIDIA secrets were compromised", but added that its inquiry would examine all available information. China denied on Monday that it had engaged in an attempt to ensnare Huang, with a foreign ministry spokesperson calling the spying allegations unsubstantiated and a smear campaign against Beijing.

Why it matters

Nvidia is one of the world's most valuable companies and sits at the centre of the global build-out of artificial intelligence, supplying about two-thirds of the world's AI computing power. The investigation raises questions for investors about whether anything more serious could emerge to jeopardise Huang's role as chief executive, or constrain the company's sales, analysts at Citi wrote in a note quoted by CNN. Nvidia is expected to report quarterly earnings on 17 November. It is another market-moving technology story for investors to watch.