Nvidia Corp. shares tumbled up to 8% before closing lower after CEO Jensen Huang admitted to an extramarital affair amid an internal investigation regarding foreign intelligence targeting the chipmaker.
The controversy broke out when Nvidia announced an internal probe into reports that its chief executive had been targeted by a foreign intelligence operation, idnfinancials.com reported. Alongside that announcement, Huang confessed to employees that he had been unfaithful to his wife.
I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did.
Huang stated in a message to staff, while affirming his commitment to protecting Nvidia and U.S. national security.
A committee composed of independent directors and external legal counsel is supervising the inquiry, according to idnfinancials.com. Nvidia stated it has no reason to believe that corporate secrets or national security have been compromised.
The investigation stems from Huang’s personal relationship with Alice Huang, a former executive at Singapore-based technology firm Megaspeed, who has no relation to the CEO. U.S. intelligence agencies suspect Alice Huang of passing information to Beijing.
The market impact was swift. Reuters reported that NVDA shares dropped sharply, erasing hundreds of billions of dollars in market capitalization and hitting a multi-month low. As idnfinancials.com noted, Jensen Huang holds a roughly 3.6% stake in the company as its fifth-largest shareholder. Wall Street analysts point out that Huang’s central role in building the CUDA ecosystem makes him a cornerstone of the firm’s market dominance.
Despite the steep drop, broader semiconductor stocks experienced a rebound. CNBC noted that rival chipmakers saw gains, with Advanced Micro Devices rising 13.26% and Arm Holdings adding 6.69% on Monday. Meanwhile, Asian suppliers such as Taiwan Semiconductor Manufacturing Co. closed up 4.7%, according to idnfinancials.com data.
Madison Huang, a Nvidia executive and daughter of Jensen Huang, canceled a scheduled trip to Seoul where she was slated to meet with AI startups like Rebellions, idnfinancials.com reported. Nvidia is scheduled to report third-quarter earnings on November 17, according to CNBC.
