(Nov 9): Nvidia Corp shares fell after the company’s board launched an investigation into chief executive officer Jensen Huang, following his admission of an affair with a woman identified in a series of reports as a suspected Chinese spy.
The stock was down about 6% on Tradegate versus Friday’s US close, while shares in Nvidia’s Asian suppliers shrugged off the news, largely tracking the broad rebound in stateside peers on Friday. The chip company is set to start trading in the US premarket at 4:00am ET.
The revelation threatens to weigh further on shares of the bellwether artificial intelligence chipmaker, following its steep selloff since last month on concerns over financing for Big Tech spending and the impact of US midterm elections.
The new crisis started over the weekend, after Huang admitted in an internal staff memo that he was unfaithful to his wife and apologised to employees, prompting the firm’s board of directors to act. Their probe follows reports that Nvidia’s leader had been targeted by former Megaspeed International executive Alice Huang, who is suspected of spying for China by US intelligence agencies.
President Donald Trump called the Nvidia CEO a “fine person,” and said he should stay on as leader of the chipmaker. Nvidia’s board said it has “no reason to believe” that either national security or the company’s secrets were compromised.Nvidia’s stock is down about 22% from its October high. The internal inquiry casts a rare cloud of leadership uncertainty over the company, just days before it’s scheduled to report quarterly earnings on Nov 17.
While Nvidia’s core business is expected to remain strong, analysts warned that any distraction at the top could create an overhang for the stock that has been the anchor of the global AI trades.
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