Nvidia shares fell as much as 8% on Monday, briefly threatening to erase roughly $350 billion in market value, as the chipmaker's board investigates whether CEO Jensen Huang was targeted by an alleged Chinese intelligence operation. The board said it has 'confidence in Jensen' and 'no reason to believe that either national security or Nvidia secrets were compromised,' while President Donald Trump called Huang 'an honorable guy.'
Huang acknowledged the affair in a message to staff and apologised, pledging to cooperate with the investigation. The New York Times reported that US intelligence believes his romantic partner, a business executive, was gathering information for China, a claim Beijing dismissed as smears.
The broader market rallied despite Nvidia's drop: the S&P 500 climbed 2.3 per cent, and the Nasdaq rose 1.87 per cent. Other semiconductor stocks also gained, suggesting investors treated Nvidia's troubles as company-specific. Separately, Democratic victories in last week's midterm elections raised worries that governments could restrict AI data-centre construction, reducing demand for chips.
Trump's close ties to Huang have drawn scrutiny. Huang flew with the president on Air Force One to China in May, attended a state dinner for Chinese President Xi Jinping in September, and Nvidia committed $25 million towards a White House ballroom. Trump awarded Huang the National Medal of Science in October and disclosed buying up to $1.6 million in Nvidia stock.
Leaders from both parties are calling for briefings. Senator Elizabeth Warren called for new legislation 'to stop advanced AI chips from fueling China's military.'
Analysts have highlighted Huang's central role at Nvidia. Huang has around 60 direct reports and runs the company with a flat structure. Bernstein analyst Stacy Rasgon told CNBC: 'Jensen is Nvidia. Nvidia is Jensen.' Analysts at Melius Research said there was no clear successor to Huang.
Some tech figures have rallied behind Huang. Gavin Baker, managing partner at Atreides Management, said he has known Huang for nearly 30 years and called him 'patriotic and deeply pro-American.'
Others say the scandal should cost him his job.
Nvidia has broken below its 50-week exponential moving average, with support levels near $164 and potentially $150. The company is scheduled to report earnings on November 17, giving investors a chance to assess its underlying business.
The midterm elections have given Democrats firm control of both chambers in the new U.S. Congress that will convene in January 2027, overturning Republican majorities.
Many in the research community are hoping the pending power shift means a more sympathetic audience for their criticisms of President Donald Trump’s policies.
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The scandal could topple the CEO of one of the world's most valuable companies, threatening the AI industry's central hardware supplier.
It exposes the close relationship between the Trump administration and a tech giant seeking to sell to China, raising national security questions.
Nvidia lacks an obvious succession plan, meaning Huang's departure could trigger market turmoil and slow AI infrastructure investment.
Background
Nvidia has become the dominant supplier of graphics processing units used to train and run AI models. CEO Jensen Huang, a co-founder, has led the company since 1993 and maintains a highly centralised management structure with no clear second-in-command. He has an unusually close relationship with President Trump, who has awarded him the National Medal of Science and backed Nvidia's pursuit of chip sales to China despite export restrictions. The current controversy stems from a New York Times report that Huang had a romantic relationship with a Chinese businesswoman whom US intelligence believes was passing information to Beijing.
Key Perspectives
Nvidia's board: says it has 'confidence in Jensen' and that it has 'no reason to believe that either national security or Nvidia secrets were compromised,' while proceeding with an independent investigation.
President Donald Trump: called Huang 'an honorable guy' and 'a fine person,' saying 'I think he probably has an excuse for it.'
China's Ministry of Foreign Affairs (Guo Jiakun): called the spying allegations 'unsubstantiated' and 'nothing but smears against China.'
Senator Elizabeth Warren (Democrat): called for legislation 'to stop advanced AI chips from fueling China's military.'
Stacy Rasgon, Bernstein analyst: said 'Jensen is Nvidia. Nvidia is Jensen,' highlighting Huang's hold on the company.
Gavin Baker, Atreides Management: said Huang is 'patriotic and deeply pro-American' and should remain CEO.
Ben Thompson, Stratechery: argued that 'absent evidence of any sort of clear betrayal of U.S. interests, it is in the interests of the U.S. that Huang continue to be CEO of Nvidia.'
Gary Black, The Future Fund: wrote 'I doubt Jensen Huang will be able to remain as $NVDA CEO.'
Ryan Fedasiuk, Foundation for American Innovation: predicted 'I don't see how it's possible for him to survive.'
What to Watch
The outcome of Nvidia's board investigation and whether it clears Huang or finds material wrongdoing.
Congressional briefings and possible new legislation on AI chip exports to China.
Nvidia's earnings report on November 17, which will test investor confidence beyond the scandal.
Whether Nvidia stock breaches key support levels or recovers above its 50-week exponential moving average.
12 claims in this story checked against 4 sources: 7 supported.
Show each claim
Not in the sourcesAnalysts warned of an “absolute bloodbath” if Huang were forced out.US Top News and Analysis: ““The issue at Nvidia is that there is no clear successor to Jensen, and we had expected him to stay in this role for at least 10 more years,” analysts at Melius Research said in a Monday research note.”
SupportedNvidia shares fell as much as 8% on Monday.Decrypt: “Nvidia shares plunged as much as 8% Monday, briefly threatening to erase $350 billion in market value even as the S&P 500 rallied.”
SupportedTrump called Huang “an honorable guy.”All Content from Business Insider: “Asked whether he wished he had acted on intelligence alleging the woman Huang had an affair with was a spy, the president said he did not. “No, I don't think so,” Trump said, adding that he thinks Huang is “an honorable guy.””
SupportedNvidia’s board said it had “confidence in Jensen.”US Top News and Analysis: “The board said it has "confidence in Jensen," and that it has "no reason to believe that either national security or Nvidia secrets were compromised."”
SupportedThe 8% share fall briefly threatened to erase roughly $350 billion in market value.Decrypt: “Nvidia shares plunged as much as 8% Monday, briefly threatening to erase $350 billion in market value even as the S&P 500 rallied.”
SupportedThe board said it had “no reason to believe that either national security or Nvidia secrets were compromised.”US Top News and Analysis: “The board said it has "confidence in Jensen," and that it has "no reason to believe that either national security or Nvidia secrets were compromised."”
SupportedHuang acknowledged the affair in a message to staff, apologised and pledged to cooperate with the investigation.OPB: “In a letter to Nvidia employees obtained by The Associated Press, Huang said he had been unfaithful to his wife and apologized to his family and colleagues.”
SupportedThe New York Times reported that US intelligence believes Huang’s romantic partner was gathering information for China.OPB: “The announcement came after Huang acknowledged to the board that he had been intimate with a business executive whom, according to The New York Times , U.S. intelligence determined was gathering information for Beijing.”
Not in the sourcesTimm Schulze-Melander said Huang could be forced out if the investigation reveals “something materially more serious.”US Top News and Analysis: ““The issue at Nvidia is that there is no clear successor to Jensen, and we had expected him to stay in this role for at least 10 more years,” analysts at Melius Research said in a Monday research note.”
Not in the sourcesBen Thompson wrote that “absent evidence of any sort of clear betrayal of U.S. interests, it is in the interests of the U.S. that Huang continue to be CEO of Nvidia.”All Content from Business Insider: “Trump and tech insiders defended Huang, saying his leadership is crucial to Nvidia and US interests.”
Not in the sourcesGary Black wrote on X, “I doubt Jensen Huang will be able to remain as $NVDA CEO.”All Content from Business Insider: “Others warned the scandal raises national security concerns and said it should cost Huang his job.”
Not in the sourcesRyan Fedasiuk predicted, “I don't see how it's possible for him to survive.”All Content from Business Insider: “Others warned the scandal raises national security concerns and said it should cost Huang his job.”
Correction
An earlier version of this story included an unsupported analyst warning in the subheadline and attributed quotations to Timm Schulze-Melander, Ben Thompson, Gary Black and Ryan Fedasiuk that do not appear in the cited sources. Those quotations have been removed.
