On Sunday, Nvidia announced that it is investigating whether its CEO, Jensen Huang, has been subjected to a “foreign intelligence effort,” following media claims of his close ties with a Chinese businesswoman who allegedly relayed information to Beijing.
In a message to staff, Huang confessed to infidelity and accepted “full responsibility” for his actions, while Nvidia stated that he remains dedicated to leading the company without any interruptions.
These events could exert pressure on the chipmaker’s stock, which has already experienced significant drops recently due to concerns over the sustainability of AI, and might also stir questions regarding Huang’s future in the leadership role of the company he co-founded.
According to a report by The New York Times last month, Huang was involved with a former executive from a Singaporean firm that U.S. authorities investigated and deemed a Chinese intelligence asset.
“The Nvidia board is launching an independent inquiry in response to recent reports that founder and CEO Jensen Huang has been targeted by a foreign intelligence effort. A committee of independent directors, with support from external independent counsel, will oversee this investigation,” the company stated.
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The multinational technology firm indicated on Sunday that while its board currently has no evidence to suggest that either U.S. national security or Nvidia’s confidential information was compromised, the investigation will consider all pertinent data.
Nvidia expressed confidence in both Huang and his leadership team, emphasizing that Huang is fully in favor of the review and is committed to cooperating with it.
‘He’s an honourable guy,’ Trump says
President Donald Trump remarked on Sunday that he had not discussed the allegations with Huang but described him as a commendable individual.
“I hope everything is okay. He has done an incredible job,” Trump added.
When queried whether he thought he should have acted on the intelligence he received, Trump responded: “No, I don’t believe so. I think he’s an honourable guy. He probably has an explanation for it. You need to listen to 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 reported that Trump had been briefed on the intelligence findings about a year ago but chose not to act on the information.
On Sunday evening, U.S. Secretary of State Marco Rubio refrained from commenting on Huang when approached by reporters.
China’s Ministry of Foreign Affairs has not yet responded to a request for comment from Reuters.
Huang, who established the company in 1993, stated he is “dedicated to safeguarding Nvidia and supporting America’s national security.”
‘Black eye moment for Jensen’
The inquiry adds to the pressure on Nvidia during a time when investors are already hesitant due to uncertainties surrounding the viability of the artificial intelligence sector, where the company is a key player.
The shares of the $4.5 trillion US chipmaker have lost all their gains for the year, following a broader decline in the tech market driven by concerns over AI sustainability.
“There is clearly a risk that Jensen could be ousted as CEO depending on the outcome of the board’s investigation, which would heighten risk for the stock as he plays a crucial role in Nvidia’s narrative and global strategy,” stated 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 represents a significant setback for Jensen and will likely prompt multiple congressional inquiries at a minimum, creating an overhang on the stock,” Ives mentioned, noting that the situation will also increase scrutiny regarding the sale of chips to China.
Huang acknowledged his infidelity, stating, “My actions have hurt my wife and our children. There is no justification for what I did. I am sincerely sorry.”
In his address to colleagues, board members, partners, and shareholders, Huang expressed: “My duty is to serve you and earn your trust. I have not met that responsibility. I am completely 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)
In late October, he informed Bloomberg News that his interactions with the Chinese businesswoman were “completely normal and not unusual.”
Josh Gilbert, lead analyst at trading platform eToro, stated that Huang’s influence is evident in every aspect of the company’s growth, so any uncertainties regarding his position would be significant for shareholders.
“While the investigation may dampen sentiment, it won’t change anything in the long run unless it results in a leadership change, which would then completely alter the dynamics,” Gilbert remarked.
Lawmakers express security concerns
Prominent Republican lawmakers in the U.S. House of Representatives have already urged Huang to brief Congress this month regarding the report published by The New York Times.
The article raises “significant national security concerns related to [China’s] ability to access sensitive U.S. technology and information,” the Republican lawmakers stated in a letter dated November 4. “It is crucial for Congress to ascertain the extent of potential risks to U.S. national security.”
Since 2022, U.S. export controls have aimed to limit China’s access to advanced Nvidia chips and the necessary equipment for their production.
