Nvidia shares tumble as investigation into CEO's alleged ties to Chinese spy intensifies
Nvidia's stock fell more than 6% on Tuesday, putting the company on track to lose over $470 billion in market value amid an internal probe into the CEO's relationship with a Chinese businesswoman accused of espionage.
Nvidia's shares continued to decline on Tuesday, extending a loss that could erase more than US$470 billion in market value over two trading sessions. The slide follows revelations that CEO Jensen Huang had a personal relationship with Alice Huang, a Chinese businesswoman alleged to be a Beijing intelligence asset, which may have facilitated at least US$7.5 billion in chip shipments to Chinese firms.
The board launched an internal investigation on Sunday and on Tuesday retained former acting U.S. Attorney Joon Kim and the law firm Wachtell, Lipton, Rosen & Katz to lead the inquiry. The FBI is also reviewing whether Jensen Huang was targeted by a foreign intelligence operation. Huang has acknowledged infidelity to his wife but declined to discuss details of the relationship.
Analysts said the episode raises questions about Nvidia's governance, export-control compliance and reliance on its founder. Bank of America wrote that investors must consider whether the issue is confined to the company or could lead to broader restrictions on AI infrastructure, adding that allegations do not automatically translate into proven business damage.
The report cited by The Information described a network of companies linked to Alice Huang, including Shanghai Century Litong, which obtained preferred cloud-partner status with Nvidia in 2023 and received priority access to chips. When orders for chips subject to U.S. export controls stalled, Alice Huang allegedly used her connections to secure supplies, moving roughly 240,000 H100, H200 and A100 units into China. Some of the hardware reportedly ended up with Alibaba, Tencent and smaller Chinese AI labs. She also held an executive role at Singapore-registered Megaspeed, a firm under U.S. investigation for routing Nvidia chips from Southeast Asia to China.
Nvidia did not immediately respond to a request for comment. Representatives for Alibaba, Tencent, Megaspeed and Shanghai Century Litong were not reachable outside regular business hours. Reuters could not independently verify the report.