Nvidia stock plummeted nearly 8% Monday morning after CEO Jensen Huang admitted to having an affair with an alleged Chinese spy and his firm – the semiconductor giant known for making cutting-edge AI chips – launched an investigation.
The stock was last trading at down 7.7% at $172.20 a share.
Huang’s ex-mistress, Alice Huang – no relation – is an executive at Megaspeed, a Singapore-based company that bought billions of dollars worth of chips from Nvidia. A secret, months-old memo from the State Department revealed that she was allegedly recruited by China’s Ministry of State Security.
A part of the board’s investigation will include whether Huang intentionally misled shareholders and the board on their relationship, and if what he was concealing would have impacted the company’s value – sparking fears that the longtime executive could be ousted.
“It does look like it was material to pricing because look what is happening to stock prices,” former SEC Chair Gary Gensler told CNBC’s “Squawk Box” Monday. “The board is going to have a hard challenge here. They’ll have some tough choices.”
Huang – who co-founded the company 33 years ago – is intimately involved with its day-to-day operations, managing about 60 direct reports.
His two children – daughter Madison Huang and son Spencer Huang, along with Madison’s husband, Nico Caprez – work at Nvidia.
Any investigation result that would require disentangling Huang from the company would be difficult.
President Trump defended Huang while speaking to reporters Sunday night, calling him an “honorable guy” and a “fine person,” saying: “He’s done an amazing job for our country.”
“I think he probably has an excuse for it. You have to hear it,” the president said, adding that he hasn’t yet spoken to the CEO.
Dan Ives, tech analyst and partner at Yorkville Ives & Co, also said that despite the wild scandal, any talk of replacing Huang is “comedy.”
“You’re talking about what I would view as the torchbearer – the leader of AI technology – not just in the US but globally,” Ives told CNBC’s “Squawk Box Europe,” adding that Nvidia’s chips are about two to three years ahead of Chinese rivals.
“So I think the fact that we’re in this situation, from an investor perspective, the clear worry is, does Jensen stay on as CEO? The Street would say probably likely, but given the board investigation, anything could happen and that creates a huge uncertainty.”
In an email to staffers on Sunday, Huang started with an apology to his family for being “unfaithful to my wife,” writing: “To my wife and family: I love you. I know an apology cannot undo what I have done. I hope our family will heal and that, over time, I can earn back your trust.”
He also apologized to his colleagues, board members, partners and shareholders, saying he had “fallen short” of his responsibilities and that they “deserve better.”
“I am fully committed to NVIDIA and will work to earn back your confidence,” Huang wrote.
The company said its board had launched an independent investigation following reports that Huang was the target of a “foreign intelligence effort.” Huang “fully supports the review and has committed to cooperating with it,” according to a statement from the firm.
It is unclear how long the affair lasted, though the pair were pictured together at a bar in Taipei in 2024.
China has denied that Huang was targeted in a spying plot.
Nvidia has emerged as a powerful player in the global AI race, developing its semiconductors to handle more complex AI tasks before any other rivals – thus securing a massive lead in chip sales. It is one of the world’s largest companies by market cap, with a roughly $4.5 trillion market value.
Huang has repeatedly been invited to the White House by Trump. Most recently, he sat at the head table during a state dinner for Chinese leader Xi Jinping in September.
In December 2025, Trump approved the sale of Nvidia’s advanced H200 chips to China, collecting a fee for each chip. The Biden administration had halted such exports over national security fears, arguing Beijing could use the chips to break ahead in the AI race.
Huang had cultivated a close relationship with Trump, attending a top-dollar donors’ dinner at Mar-a-Lago, Fla., with his wife and personally lobbying the president to allow the sale of chips to China, the New York Times reported last month.
Nvidia subsequently donated at least $20 million to Trump’s White House ballroom fund, the report said, citing a person familiar with the matter.
