Nvidia takes a hit on Wall Street as the board’s investigation into Huang over alleged espionage takes its toll
The CEO is said to have had a relationship with a female executive in the technology sector who – according to US intelligence – was allegedly used by Beijing to gather information on Nvidia’s chief executive
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(Il Sole 24 Ore Radiocor) - Nvidia Corp has plummeted on Wall Street after its board launched an independent investigation into its CEO and founder, Jensen Huang, following reports that he had been the target of a Chinese intelligence operation. In particular, the scandal erupted following rumours that Huang had been in a relationship with a female executive in the technology sector who – according to US intelligence – had been used by Beijing to gather information on Nvidia’s chief executive.
For his part, Huang has publicly admitted to being unfaithful to his wife and has apologised. The board has entrusted the investigation to a committee of independent directors, assisted by external legal advisers. Nvidia states, however, that it currently has ‘no reason to believe that national security or Nvidia’s secrets have been compromised’ and confirms its confidence in Huang, who has pledged his full cooperation.
The story adds a new element of uncertainty to a stock that is already highly sensitive to doubts about the sustainability of global spending on AI. “Given Huang’s central role in Nvidia’s success and in the broader context of AI investment, even mere speculation could unsettle investors,” commented Daniela Hathorn of Capital.com. According to other analysts, however, the CEO could end up stepping down, even if only temporarily, as “he is in a precarious position and the level of risk in his situation is currently at its highest”, pointed out Dan Coatsworth of AJ Bell.
The scandal has also brought back into the spotlight Nvidia’s delicate relationship with China. In recent years, Huang has in fact been pushing to keep the Chinese market open to the group’s chips, against a backdrop of US export restrictions on the most advanced processors. Investors are now keeping a close eye on both the progress of the investigation and the upcoming quarterly results: Nvidia is due to present its results for the third quarter of the 2027 financial year on 17 November.
