Nvidia announced on Sunday that it is investigating whether CEO Jensen Huang has been targeted by a “foreign intelligence effort,” following a media report that suggested he maintained a close connection with a Chinese businesswoman who allegedly conveyed information to Beijing.
In a message to staff, Huang acknowledged his infidelity to his wife and accepted “full responsibility” for his actions, while Nvidia stated that the CEO intends to continue leading the organization without disruption.
These events may exert pressure on the chip manufacturer’s stock, which has already experienced significant declines recently due to concerns regarding the sustainability of AI, and could also raise uncertainties about Huang’s future as the leader of the company he co-founded.
According to a report from The New York Times last month, Huang was involved with a former executive of a Singaporean firm that U.S. authorities investigated and determined was linked to Chinese intelligence.
“The Nvidia board is initiating an independent investigation in light of recent reports suggesting that founder and CEO Jensen Huang has been the target of a foreign intelligence effort. A committee of independent directors, with the assistance of outside independent counsel, will oversee the investigation,” the company stated.
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The global tech giant indicated on Sunday that while its board has no reason to suspect that U.S. national security or Nvidia’s sensitive information has been compromised, its investigation will review all relevant information.
The board expressed confidence in both the CEO and his leadership team, with Nvidia adding that Huang fully supports the review and is committed to cooperating with it.
‘He’s an honourable guy,’ Trump says
U.S. President Donald Trump stated on Sunday that he has not discussed the allegations with Huang but referred to him as a good person.
“I hope everything’s fine. He’s done such an incredible job,” Trump remarked.
When asked if he felt he should have acted on intelligence when he was briefed, Trump responded: “No, I don’t think so. I believe he’s an honourable guy. He probably has an explanation for it. You need to hear it.”
Huang and U.S. President Donald Trump are shown in Washington on Oct. 8. (Julia Demaree Nikhinson/The Associated Press)
The New York Times previously reported that Trump was informed about the intelligence findings approximately a year ago but chose not to take action.
U.S. Secretary of State Marco Rubio declined to comment on Huang when approached by reporters on Sunday evening.
China’s Ministry of Foreign Affairs has not yet responded to a request for comment from Reuters.
Huang, who established the company in 1993, asserted that he is “dedicated to protecting Nvidia and supporting America’s national security.”
‘Black eye moment for Jensen’
The investigation compounds the pressure on Nvidia as investors are already growing cautious due to uncertainties surrounding the sustainability of the artificial intelligence sector, where the firm is a leading player.
The $4.5 trillion chipmaker’s shares have lost all their gains for the year amidst a broader tech market downturn influenced by concerns over AI sustainability.
“There is clearly a risk that Jensen could be removed as CEO depending on the board’s findings, which will add further risk to the stock as he plays a crucial role in Nvidia’s narrative and global strategy,” remarked Dan Ives, partner and senior managing director at Yorkville Ives & Co.
The artificial intelligence boom is driving a worldwide shortage in memory chips that could soon drive up prices in everything from smartphones to laptops to video game consoles.
“This is a black eye moment for Jensen and is likely to trigger multiple congressional inquiries at a minimum and will create an overhang on the stock,” Ives noted, adding that the situation would also increase significant scrutiny regarding chip sales to China.
Huang has acknowledged his infidelity, stating, “My actions have hurt her and our children. There is no justification for what I did. I am profoundly sorry.”
In addressing his colleagues, board, partners, and shareholders, Huang remarked: “My duty is to serve you and earn your trust. I have not met that responsibility. I am entirely committed to Nvidia and will strive to regain your confidence.”
Huang delivers a speech at a company event in Berlin on Oct. 21. (Markus Schreiber/The Associated Press)
At the end of October, he told Bloomberg News that his interactions with the Chinese businesswoman were “completely normal and not unusual.”
Josh Gilbert, lead analyst at trading platform eToro, remarked that Huang’s influence is evident in every facet of the company’s growth, thus any uncertainty regarding his position would concern shareholders.
“While the investigation may dampen sentiment, it will not have long-term effects unless it results in a leadership change, at which point it would become a fundamentally different situation,” Gilbert stated.
Lawmakers express security concerns
Prominent Republican lawmakers in the U.S. House of Representatives have already urged Huang to provide a briefing to Congress this month regarding the New York Times report.
The article raises “significant national security concerns about [China’s] access to sensitive U.S. technology and information,” stated the Republican lawmakers in a letter dated November 4. “It is essential for Congress to assess the extent to which U.S. national security has been compromised.”
Since 2022, U.S. export controls have aimed to limit China’s access to advanced Nvidia chips and the manufacturing equipment necessary to produce them.
