Nvidia shares fell about 8% at the start of US trading on Monday, wiping roughly $350 billion off the chipmaker’s market value, according to Reuters. The drop came a day after Nvidia’s board said it was opening an independent investigation into whether CEO Jensen Huang had been targeted by a foreign intelligence operation.
The investigation centres on Huang’s alleged relationship with Alice Huang (no relation), a former executive at Singapore-based data centre company Megaspeed. The New York Times first reported the relationship on October 29, along with US authorities’ suspicions that she was working for China’s Ministry of State Security. On November 7, the Financial Times reported that an internal US intelligence memo backed up those findings.
Huang has since admitted to the affair. “There is no excuse for what I did. I am deeply sorry,” he said in a statement posted on Nvidia. “I support the investigation and will cooperate fully.”
The selloff extends a difficult stretch for Nvidia. Its shares were already at multi-month lows amid growing doubts about how much companies are spending on AI and data centres. The allegations have given investors one more thing to worry about.
David Adubiina
What Nvidia’s board has said
The board said a committee of independent directors, supported by outside counsel, will oversee the investigation. It shared that it has no reason to believe company secrets or national security were compromised, and that it “prioritizes U.S. national and economic security.” It has also said it has confidence in Huang.
Megaspeed did not respond to Reuters’ request for comment on Monday, which was a public holiday in Singapore. According to the New York Times, the company bought more than $4.8 billion worth of Nvidia chips over the past two years.
Why investors are nervous, but not panicking
Nvidia’s troubles didn’t begin with this scandal. Investors had already grown cautious about the huge sums being poured into AI infrastructure, with questions over long-term returns, rising costs and the growing use of debt to fund data centre expansion.
“The market’s probably telling you now this does no favours to the stock whatsoever,” Chris Weston, head of research at Pepperstone, told Reuters.
Weston also pointed out what the market isn’t pricing in: Huang leaving. If investors genuinely believed he was about to step down, he said, the stock would be falling much further.
“If we genuinely thought he was going to step down… the stock would be down – it would be an absolute bloodbath, to be honest,” he said.
That distinction matters. Huang co-founded Nvidia in 1993 and has led it ever since, and he’s closely tied to the company’s identity and its rise to the top of the AI industry. For now, the market is pricing in uncertainty about his position, not his exit.
Why Nvidia’s Asian suppliers moved the other way
While Nvidia fell, some of its biggest Asian suppliers rose. TSMC closed 4.7% higher, while Samsung Electronics and SK Hynix gained 0.6% and 0.4%, respectively.
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