Nvidia stock rose 5.3% in premarket trading on Wednesday as investors weighed CEO Jensen Huang’s admission of an extramarital affair with an executive US intelligence officials believe is a Chinese spy.
The semiconductor giant’s shares had fallen over the two sessions before Wednesday, shedding 10% of their value or about $450 billion, according to CBS News. Nvidia announced Tuesday it launched an independent investigation into whether national security or company secrets were compromised, CNBC reported.
“.. Employees inside the company described the mood at the chipmaking giant as ‘sad.’”@seemacnbc @CNBC $NVDAhttps://t.co/hFIKSeXi51 pic.twitter.com/BDS1bpGRuL
The controversy centers on Huang’s relationship with Alice Huang, a Chinese executive linked to the Singapore-based data center company Megaspeed. Companies linked to the alleged spy have reportedly enabled at least $7 billion of Nvidia chip sales to China, CNN reported. Corporate records indicate that Huang was a director at Megaspeed.
“cannot close the gap with US frontier capabilities,” Kilcrease, a senior fellow and director of the energy, economics, and security program at the Center for a New American Security (CNAS) think tank, tells The Verge.
$NVDA just announced an independent board investigation into reports that CEO Jensen Huang was targeted by a foreign intelligence effort. The board emphasized it has “no reason to believe that either national security or Nvidia secrets were compromised” while reaffirming its… pic.twitter.com/jc7UfUF1iT
U.S. Customs and Border Protection records show Alice Huang has visited the United States ten times since 2017, including a March visit to Nvidia headquarters in Santa Clara during the company’s annual conference.
President Donald Trump said at an impromptu news conference that Huang told him he had no idea the person was a spy. Trump added, “I really believe him,” according to NBC News. Trump also said that he called Huang simply to check on his well-being.
Yes, this is a sensational story, but put the tabloids aside for a second. Donald Trump is selling America’s security to our foreign adversaries. In the spring, Marco Rubio warned senior Trump officials that Jensen Huang, CEO of Nvidia, was involved with a woman U. S.…
A person familiar with the matter said that the Justice Department instructed the Commerce Department to pause its investigation into whether Megaspeed smuggled Nvidia artificial intelligence chips into China.
House Republicans have requested a closed-door briefing with the CEO. Rep. Brian Mast told ABC News he is prepared to subpoena Huang if he does not respond. The proposed briefing focuses on Nvidia’s security protocols against foreign adversary espionage.
SEN. CRAMER: “.. I just think he’s got to go.”@politico $NVDA https://t.co/pZ0d0t05zH pic.twitter.com/rynaSsewJp
House Minority Leader Hakeem Jeffries said that there are real concerns that need to be addressed regarding national security implications.
Nvidia’s board has expressed continued support for Huang while the review proceeds. Jeffrey Sonnenfeld, who called Huang’s career salvageable, discussed Huang in an interview.
The company’s 11-person board includes Huang, while the remaining members are considered independent, such as California Institute of Technology professor John Dabiri and former Taco Bell International president Melissa Lora, according to company regulatory filings.
Other analysts took a different view of the company’s dependency on its co-founder. “If something happens to Jensen Huang, what happens to Nvidia’s valuation?” said Dan Ives, an analyst at Yorkville Ives.
Ives estimated in a research note that Nvidia could lose as much as 30% of its valuation if Huang is removed from his role, though he said that most investors expect him to remain in his post.
Huang was in the office on Tuesday, conducting meetings ahead of Nvidia’s quarterly earnings report scheduled for November 17, CNBC reported. Bank of America analyst Vivek Arya outlined multiple scenarios for the company, warning of escalated impacts should adverse findings prompt leadership disruption or stricter regulatory restrictions.
Earlier coverage: Nvidia Board Launches Probe Into CEO Jensen Huang's Ties to Chinese Asset
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