Nvidia shares fall 5% as Jensen Huang faces intelligence scrutiny

Nvidia shares fell 5% on Monday after dropping as much as 8% intraday, putting more than $250 billion in value at risk from its last closing price at current levels, Reuters reported. Reuters said the decline extended last week’s selloff and pushed the stock to fresh multi-month lows.

The move followed Sunday’s announcement of an internal Nvidia investigation into whether Chief Executive Officer Jensen Huang had been targeted by a foreign intelligence effort. Reuters said the inquiry put Huang’s future under scrutiny. The 63-year-old leader heads the world’s most valuable chipmaker and serves as the most prolific salesman of the AI boom.

What set off the internal inquiry?

The investigation followed a New York Times report last month about Huang’s close relationship with Alice Huang, an unrelated former executive of Singapore-based Megaspeed. Reuters described Alice Huang as a Chinese businesswoman who allegedly passed information to Beijing. The Times reported that U.S. authorities investigated Alice Huang and concluded she was a Chinese intelligence asset.

Jensen Huang told Nvidia employees that he had been unfaithful to his wife, without disclosing details of the relationship, Reuters reported. Reuters said the probe announced Sunday followed the report and admission.

Neither Alice Huang nor Megaspeed answered Reuters on Monday. Megaspeed did not immediately respond because Monday was a public holiday in Singapore. Reuters could not determine Alice Huang’s location to seek comment.

Chinese Foreign Ministry spokesperson Guo Jiakun rejected the account in Beijing. “The so-called Chinese spy narrative is purely a groundless accusation, slander, and a smear,” Guo told reporters.

How much power does Huang hold?

Huang’s roughly 3.6 percent stake makes him Nvidia’s fifth-largest shareholder, according to LSEG data. Reuters also reported that dozens of executives report directly to him under an unusually flat management structure.

Reuters said that structure gives Huang a tight grip on Nvidia. It does not give him majority voting control. Unlike Meta Platforms or SpaceX, Nvidia has no dual-class shares that would give its co-founder majority voting control.

Nvidia’s board said it has confidence in Huang. Most analysts cited by Reuters acknowledged uncertainty around succession. They did not expect the investigation to result in the longtime chief executive stepping down.

Shay Boloor, chief market strategist at Futurum Equities, put the risk this way: “The key-person risk is massive since Jensen co-founded Nvidia, built the CUDA ecosystem that underpins its competitive advantage and personally anchors relationships with the largest AI customers and governments.”

Reuters described the leather-jacketed Huang as a rock star worldwide, particularly in Asia. There, he often mingles freely with fans, takes selfies and signs autographs for his followers.

What changed in Seoul?

Madison Huang, Jensen Huang’s daughter and an Nvidia executive, canceled a planned visit to Seoul for a conference set to begin Monday, Reuters reported, citing the companies she planned to meet. Her itinerary included a visit to South Korean AI startup Rebellions and a question-and-answer session with Kakao Mobility.

Rebellions said the events were canceled because of “unavoidable internal circumstances at Nvidia.”

Nvidia AI Day Seoul, a two-day event expected to draw about 2,000 participants, was set to proceed as planned, according to South Korean media. The event was due to discuss physical AI, agentic AI and infrastructure. Nvidia did not respond immediately to a request for comment.

South Korea’s deputy science minister said Monday that the government expected no disruption to contracted deliveries of Nvidia graphics processing units. The statement addressed supply commitments, but it left the leadership inquiry unresolved.

Who defended Huang?

Billionaire investor Bill Ackman, founder of Pershing Square Capital Management, called Huang an “incredible human” on X. He warned that if “indeed this is more than an affair, then it is obviously a real problem.” Ackman added: “I am hoping for a simple affair, not a risk to our national security.”

Tesla CEO Elon Musk commented, “I agree,” on a post by Sequoia partner Shaun Maguire. The post said Huang “did something incredibly dumb” and called that “bad for America.” It also said “Jensen is irreplaceable for America’s AI leadership.”

U.S. President Donald Trump said Sunday that he had not spoken with Huang about the allegations. Trump called him a fine person and said: “I hope everything’s fine. He’s done such an incredible job.”

Asked whether he should have acted on intelligence he received, Trump said: “No, I don’t think so. I think he’s an honorable guy. I think he probably has an excuse for it. You have to hear it.” The New York Times reported that Trump received a briefing roughly a year earlier and chose not to act on the information.

What could this mean for chips and China?

Reuters reported that shares in Nvidia’s key Asian chip suppliers rebounded on Monday after the previous week’s AI-related stock selloff. TSMC closed 4.7 percent higher. Samsung Electronics gained 0.6 percent, and SK Hynix rose 0.4 percent.

Analysts cited by Reuters said a prolonged investigation or internal review could delay Nvidia’s investment decisions or product launches. They said the uncertainty could have broader implications for the semiconductor industry.

Ryu Young-ho, a senior analyst at NH Investment & Securities, said Advanced Micro Devices and other rivals could attract greater short-term attention. He said that could put Samsung, which has close business ties with AMD, in the spotlight.

Ryu said Nvidia’s products would be difficult to replace, limiting the potential impact. He also said shipments to China could face further delays, depending on how the situation developed.

The next measurable tests are the duration of Nvidia’s inquiry, the pace of investment and product launches, and whether GPU shipments to China or South Korea slip. For now, Nvidia’s board backs Huang, South Korea expects no disruption to contracted deliveries, and most analysts expect him to remain in place. The market’s 5 percent decline shows that investors have not dismissed the succession risk.