Nvidia’s stock experienced a significant drop on Monday following the announcement of an internal investigation regarding whether CEO Jensen Huang had been the target of foreign intelligence. This scrutiny has raised questions about his future with the AI chip manufacturer.
The investigation was initiated after reports surfaced that Huang had a close association with a Chinese businesswoman, who is alleged to have shared sensitive information with Beijing. Huang acknowledged his infidelity to Nvidia’s workforce but did not provide specifics about the relationship.
This inquiry, unveiled on Sunday, has cast doubt on Huang’s prospects at a time when Nvidia stands as the leading chipmaker globally and Huang is recognized as a key figure driving the AI industry’s expansion.
Huang, often seen in his signature leather jacket, is admired by many, particularly in Asia, where he interacts with fans, taking selfies and signing autographs for his enthusiastic supporters.
According to LSEG data, Huang holds approximately 3.6 percent of Nvidia’s shares, making him the fifth-largest stakeholder. He maintains a strong influence over the company through a unique structure that allows numerous executives to report directly to him.
However, unlike companies such as Meta Platforms or SpaceX, Nvidia does not possess dual-class shares that would provide its co-founder with majority voting rights.
The repercussions of the investigation reached as far as South Korea, where Madison Huang, Jensen Huang’s daughter and an executive at Nvidia, cancelled a scheduled trip to Seoul for a conference that was set to commence on Monday, according to the companies she was supposed to meet.
Nvidia’s stock plummeted by about six percent, reaching its lowest intraday price since March 31.
“The market is likely indicating that this situation does not bode well for the stock, especially as there is much speculation surrounding the expansion of data centers,” stated Chris Weston, head of research at brokerage Pepperstone in Melbourne, Australia.
Despite this, Weston expressed doubt that Huang, whom he referred to as the “godfather of AI,” would be replaced.
“If we genuinely believed he was going to step down… the stock would be down significantly — it would be a complete disaster, to be truthful,” he added.
Nvidia has stated that its board continues to support Huang. Some analysts noted that there is no clear successor within the company should he choose to resign.
The New York Times reported last month that Huang had a relationship with Alice Huang, an unrelated former executive of the Singapore-based firm Megaspeed, who was investigated by U.S. authorities and identified as a potential Chinese intelligence operative.
Guo Jiakun, a spokesperson for China’s Foreign Ministry, dismissed the allegations, stating, “The so-called Chinese spy narrative is merely unfounded accusations, slander, and defamation,” during a press briefing in Beijing.
A screengrab from CTI video footage obtained Monday shows a woman identified by Reuters as Alice Huang, after comparison with a photograph obtained separately, attending a dinner with Nvidia CEO Jensen Huang at a restaurant in Taipei, Taiwan, on May 22, 2025. (CTI/Reuters)
Megaspeed did not immediately respond to a request for comment on Monday, which was a public holiday in Singapore.
Alice Huang did not reply to the New York Times when it initially reported her relationship with Jensen Huang, and Reuters was unable to locate her for comment on Monday.
Asia partners unaffected
On Monday, stocks of Nvidia’s primary Asian chip suppliers rebounded following last week’s decline in AI-related shares, with TSMC closing up by 4.7 percent, while Samsung Electronics and SK Hynix rose by 0.6 percent and 0.4 percent, respectively.
Prominent individuals shared their thoughts on Huang’s admission. Billionaire investor Bill Ackman, founder of Pershing Square Capital Management, remarked on X that the Nvidia CEO is an “incredible human,” but cautioned that if “this is indeed more than just an affair, it obviously presents a serious issue.”
“I hope it is a simple affair and not a threat to our national security,” he added.
Tesla CEO Elon Musk responded, “I agree,” to a post by Sequoia partner Shaun Maguire, who stated that Huang “did something incredibly foolish” that was “detrimental to America,” but acknowledged that “Jensen is irreplaceable for America’s AI leadership.”
U.S. President Donald Trump stated on Sunday that he had not discussed the allegations with Huang but described him as a commendable individual. “I hope everything’s alright. He has done an outstanding job,” he remarked.
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When asked if he believed he should have taken action regarding the intelligence when he was informed, Trump replied: “No, I don’t think so. I believe he is an honorable person. He likely has a justification for it. You should listen to his explanation.”
The New York Times noted that Trump was briefed on the intelligence findings about a year ago but opted not to act on the information.
Cancelled visit
Madison Huang had originally intended to visit the South Korean AI startup Rebellions and participate in a Q&A session with Kakao Mobility. Rebellions reported that the events were cancelled due to “unavoidable internal circumstances at Nvidia.”
Despite this, the Nvidia AI Day Seoul, a two-day event expected to attract around 2,000 attendees to discuss various aspects of AI, will proceed as planned, as reported by South Korean media. Nvidia has not yet responded to inquiries for comments.
Market analysts indicated that an extended investigation or internal review could potentially postpone Nvidia’s investment plans or product releases, which may have broader consequences for the semiconductor sector.
Ryu Young-ho, a senior analyst at NH Investment & Securities, suggested that Nvidia’s competitors, such as Advanced Micro Devices, may garner more attention in the short term, potentially placing Samsung, closely linked to AMD, in a favorable position.
Nonetheless, he noted that Nvidia’s offerings would be challenging to substitute, which would limit the overall impact, although shipments to China might face additional delays as the situation evolves.
On Monday, South Korea’s deputy science minister reassured that the government anticipated no disruptions to the contracted deliveries of Nvidia graphics processing units, despite the current challenges facing the company.
