The chipmaker’s board has opened an independent inquiry into whether its chief executive was the target of a foreign intelligence effort. China says the claims are a smear.
Shares in Nvidia fell sharply on Monday after the chipmaker’s board opened an investigation into whether its chief executive, Jensen Huang, had been targeted by Chinese intelligence.
Huang admitted on Sunday to an extramarital affair. The New York Times has reported that the relationship was with Alice Huang (no relation), whom US intelligence officials believe works for China’s Ministry of State Security.
China has rejected the claims. Nvidia’s board says it has no reason to believe that national security or company secrets were compromised.
In a note to staff, Huang apologised for being “unfaithful to my wife”. “My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry,” he said.
He said he would cooperate fully with the investigation and was “committed to protecting Nvidia and supporting America’s national security”.
The board said the inquiry, overseen by outside independent counsel and a committee of independent directors, would examine whether Huang “has been the target of a foreign intelligence effort”. It said it would “examine all available information” and had “confidence in Jensen and his leadership team”.
A company spokesperson said Huang was “committed to continuing to lead Nvidia as CEO without interruption”.
Alice Huang is a senior figure at a Singapore-based data centre company. She is also linked to Megaspeed, an Nvidia customer that has been accused of helping Chinese companies subject to US restrictions obtain Nvidia’s AI chips.
US Secretary of State Marco Rubio is reported to have written a memo about the relationship. Alice Huang has not been charged with any offence.
China’s foreign ministry dismissed the claims. Spokesperson Guo Jiakun said the “so-called Chinese spy allegation is unsubstantiated” and amounted to “smears against China”.
Nvidia, the world’s most valuable company, saw its shares fall as much as 8% in early trading on Monday before recovering some ground.
The stock had already dropped 12% in the two days after last week’s US midterm elections, as investors worried that a new Congress, state lawmakers and newly passed ballot measures could slow the AI building boom.
The company reports quarterly results on 17 November, when Huang is expected to face questions from analysts.
President Donald Trump defended Huang, telling reporters on Sunday that he was “an honourable guy” who had “done an amazing job for our country” and “probably has an excuse for it”. He also described him as “a fine person, but you never know what’s going on”.
Huang has built close ties with the administration. He joined Trump on Air Force One for a trip to China in May, and Nvidia has lobbied the White House against tighter limits on chip sales to China.
The scandal comes as Democrats prepare to take control of both houses of Congress after their midterm victories. Senator Chris Coons, in line to chair the Senate Foreign Relations Committee, said that “Congress will investigate and get answers”.
Hakeem Jeffries, expected to become Speaker of the House, called it “a significant issue of concern”. Senator Elizabeth Warren, set to chair the Senate Banking Committee, said there was “substantial bipartisan support” for tougher curbs on AI chip exports to China.
The pressure is not only from Democrats. Republican Representative Michael McCaul, a former chair of the House Foreign Affairs Committee, said the US should “immediately pause the shipment of advanced AI chips to China” until the matter was resolved. House Republican leaders have also asked Huang for a closed-door briefing on Chinese spying later this month.
Lawmakers from both parties had already been pushing to add chip export controls to the annual defence bill before Congress breaks for the year.
Huang co-founded Nvidia in 1993 and has led it ever since, building a personal fortune of more than $150bn. The company has no obvious second-in-command and no board chair; Huang is one of 11 directors.
Unlike founders such as Meta’s Mark Zuckerberg, Huang holds only ordinary shares, about 3.6% of the company, with no extra voting rights to protect him from his board.
“Nvidia is not an ordinary company and Jensen is not an ordinary CEO; he IS Nvidia,” said Stacy Rasgon, an analyst at Bernstein, adding that it was not clear who would succeed him.
The controversy comes at a sensitive moment for the AI industry. Nvidia is an investor in, and a major supplier to, several AI companies whose shares are under pressure, including Anthropic, which is preparing a stock market listing.