Nvidia Probes Reports CEO Jensen Huang Was Target of Foreign Intelligence Effort
Nvidia opened an independent probe into reports CEO Jensen Huang was targeted by a foreign intelligence effort, sending shares lower in overnight trading.
Image: Wikimedia Commons / Anderseidesvik
Reuters reported that Nvidia’s board has opened an independent investigation into reports that chief executive Jensen Huang was the target of a foreign intelligence effort, a disclosure that sent the chipmaker’s shares down about 4 per cent in overnight trading. The board announced the inquiry on Sunday.
The board said it had no reason to believe United States national security or Nvidia’s trade secrets had been compromised, and expressed confidence in Huang’s leadership. Huang has agreed to cooperate and will continue as chief executive. Nvidia reports earnings on 17 November.
- Nvidia’s board has opened an independent investigation into reports that chief executive Jensen Huang was the target of a foreign intelligence effort.
- Shares fell about 4 per cent in overnight trading, to about $180.30 from Friday’s Nasdaq close of $186.64, and the stock is down roughly 22 per cent from its October peak.
- Huang remains chief executive and will cooperate with the inquiry, and Nvidia reports earnings on 17 November.
The investigation follows a report published by The New York Times on 29 October that Huang had developed a close relationship with Alice Huang, a former executive at Megaspeed, a Singapore-based data-centre company that buys Nvidia chips. According to the report, United States intelligence agencies concluded that Alice Huang, a Chinese citizen, was an intelligence asset passing information to Beijing; those claims have not been independently established through public evidence.
Huang told Nvidia employees he had been unfaithful to his wife, without disclosing details. Nvidia has not announced any finding of espionage or wrongdoing involving company secrets.
Nvidia shares traded at about $180.30 in after-hours and perpetual-futures trading, down about 3.4 per cent from Friday’s Nasdaq closing price of $186.64, while overnight trading on the Blue Ocean system showed the stock down about 4 per cent. The stock is down roughly 22 per cent from its October peak after a 9.26 per cent drop on 5 November.
| Figure | Value |
|---|---|
| Friday Nasdaq close | $186.64 |
| After-hours trading | About $180.30, down about 3.4 per cent |
| Overnight, Blue Ocean system | Down about 4 per cent |
| Fall from October peak | Roughly 22 per cent |
| Drop on 5 November | 9.26 per cent |
| Next earnings report | 17 November |
Nvidia sits at the centre of the global artificial intelligence trade: the world’s leading maker of AI chips, it reached a $5 trillion market capitalisation last year, so any question over its leadership reaches suppliers, customers and the wider AI hardware market. The cooling market for big AI bets has already put the sector under pressure.
Shares in Nvidia’s key Asian suppliers rebounded after last week’s sell-off, with TSMC up 6.5 per cent and Samsung and SK Hynix up 2.9 per cent and 4.7 per cent respectively, even as Nvidia itself fell. Analysts expect the investigation to prompt congressional inquiries and to weigh on the stock until its findings are known.
The fallout has already reached beyond the markets. Madison Huang, Huang’s daughter and an Nvidia executive, cancelled a planned visit to Seoul for an Nvidia conference due to begin on Monday, according to companies she had been scheduled to meet. President Donald Trump said on Sunday that he had not spoken to Huang about the allegations, but called him a fine person. The New York Times reported that Trump was briefed about the intelligence findings roughly a year ago and chose not to act.
For investors, the investigation adds a new question to a stock already under pressure: Nvidia has fallen roughly 22 per cent from its October peak, and the inquiry is likely to weigh on the shares until its findings are known. The wider market rebound has not lifted Nvidia with it, and the company has given no timetable for the inquiry. What happens next will turn on the board’s inquiry and Nvidia’s earnings report on 17 November.
Frequently Asked Questions
Why did Nvidia’s shares fall?
The board’s announcement sent the shares down about 4 per cent in overnight trading, extending a slide of roughly 22 per cent from the October peak after a 9.26 per cent drop on 5 November.
What has the board said about the reports?
A committee of independent directors, assisted by outside counsel, will examine the reports. The board has no reason to believe United States national security or Nvidia’s trade secrets were compromised.
Has Nvidia found any wrongdoing?
No. Nvidia has not announced any finding of espionage or wrongdoing involving company secrets.
