Nvidia’s Stock Set to Drop as Board Probes CEO Jensen Huang
Nvidia's board opened an investigation on Sunday into whether CEO Jensen Huang was targeted by a foreign espionage plot, after he admitted to employees that he was unfaithful to his wife. Huang remains in his role while the probe runs.
Nvidia Corp.'s board opened an investigation on Sunday into whether Chief Executive Officer Jensen Huang was targeted by a foreign espionage plot, a move that leaves Nvidia's stock set to drop when US markets reopen. The probe follows Huang's admission to employees that he was unfaithful to his wife.
The board will assemble a committee of independent directors, working with outside counsel, to oversee the inquiry, the company said in a statement. Huang, 63, will stay on as CEO pending the results.
What Huang told staff
In a memo to employees, Huang said he was "deeply sorry" for the affair. "I was unfaithful to my wife," he wrote. "My actions hurt her and our children. There is no excuse for what I did."
He said he is fully cooperating. "I love our country and our company, and I am committed to protecting Nvidia and supporting America's national security," he added.
The espionage question
The admission follows a series of reports that Huang was targeted by Alice Huang, a former executive at Megaspeed International. The US government suspects she was recruited by a Chinese spy agency. Huang had previously denied having anything but a "normal" relationship with her.
The board said its inquiry will address reports that Huang "has been the target of a foreign intelligence effort." It added that it has "no reason to believe that either national security or Nvidia secrets were compromised," but will examine all available information.
Megaspeed, based in Singapore, has been accused of breaking US export restrictions and smuggling Nvidia chips to China.
Why investors are watching
Nvidia reports earnings later this month. Investors have poured money into the company, betting it will remain the main beneficiary of heavy spending on AI infrastructure.
Its market capitalization hit a record of nearly $5.8 trillion in October. It has since slipped below $5 trillion, weighed down by concern over whether the AI build-out is sustainable.
Huang co-founded the Santa Clara, California-based company and built it into arguably the world's most important technology firm. Nvidia has no public succession plan and no obvious heir apparent. He has said he wants to stay in the job for decades.
Huang runs the company through an informal structure in which his direct reports rapidly carry out his decisions. That leaves no replacement ready to take over his schedule.
China adds pressure. Nvidia can ship a limited range of products there under a licensing program granted by the Trump administration, but Beijing has restricted imports of the chips, curbing sales in the world's second-largest economy.
Concerns that sensitive information might leak through Nvidia's contacts with China have already fueled calls for greater scrutiny of Huang and the company.
