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By Khaleda Rahman
National Correspondent
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Shares in Nvidia fell on Monday after the artificial intelligence giant said it was opening an investigation into reports its CEO Jensen Huang was the target of a foreign intelligence effort.
It comes after shares in Nvidia, one of the world’s most valuable publicly traded companies, and others linked to the artificial intelligence boom lost billions in market value on Thursday over worries that Democrats' huge victory in the midterm elections could slow the construction of AI data centers, before recovering some ground on Wall Street on Friday.
Shortly after the stock market opened on Monday, Nvidia prices were $174.21 a share, down more than 6 percent from Friday's Nasdaq closing price of $186.64.
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Nvidia is one of the so-called Magnificent Seven technology companies that have driven much of the stock market’s gains in recent years.
The announcement of an independent investigation from Nvidia’s board of directors follows a report in The New York Times last month that Huang had an affair with a Chinese businesswoman who allegedly passed information to Beijing.
The report said U.S. intelligence agencies had discovered that Huang had a relationship with Alice Huang, a Chinese citizen, and determined that she was a Chinese intelligence asset. The two are not related, according to the newspaper. Alice Huang was a television reporter in China before she became a top executive at Singapore-based data center company Megaspeed, one of Nvidia’s biggest customers in Southeast Asia.
Huang said in a message to Nvidia’s staff, later shared with Newsweek, that he had been unfaithful to his wife and apologized to his family and colleagues, saying he took "full responsibility" for his actions. He did not name Alice Huang or address her apparent ties to Beijing. However, he did refer to the national security concerns raised in news reports and said he supported the board’s investigation and cooperated with it fully.
In a statement, Nvidia’s board of directors said it has "no reason to believe" that either national security or Nvidia secrets were compromised, but that its inquiry would examine all available information. Huang "fully supports the review and has committed to cooperating with it," the statement said.
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A spokesperson for Nvidia told Newsweek that the news would not slow the company down. "Jensen is committed to continuing to lead Nvidia as CEO without interruption," the spokesperson said.
China has dismissed allegations of a plot to ensnare Huang. "The 'Chinese spy’ allegation is purely unsubstantiated and directed at smearing China," Ministry of Foreign Affairs spokesperson Guo Jiakun said on Monday.
Huang and Nvidia: What to Know
Huang is a close ally of President Donald Trump and a leading figure in the global race for AI supremacy.
The 63-year-old was born in Taiwan and spent his childhood in Thailand, before moving to the U.S. and becoming a naturalized U.S. citizen. He co-founded Nvidia in 1993, alongside Chris Malachowsky and Curtis Priem, and he has been the company's CEO since its founding.
Nvidia made its name producing graphics hardware for gaming, but it eventually transformed into one of the leading tech companies focused on AI, as well as autonomous vehicles and robotics.
As part of that, the company has found itself at the center of competition between the U.S. and China, with advanced AI chips regarded as strategically important technology and the company able to sell in both markets. The company's manufacturing of advanced semiconductors also falls within national security concerns, with Washington, D.C. not wanting China to have access to the components.
Trump, Others Weigh In
Trump defended Huang, who serves on the president’s Council of Advisors on Science and Technology, when asked about Nvidia's investigation.
He told reporters on Sunday that he had not spoken with Huang about the allegations, but called him a "fine person."
"I hope everything's fine there. He's done such an incredible job," he said.
Asked if he wished he had acted on intelligence when he was briefed about it, 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…He’s done an amazing job for our country."
Trump was briefed about the intelligence findings last year and chose not to do anything with the information, according to The Times.
Business and tech leaders have also weighed in.
Billionaire investor Bill Ackman, the founder of Pershing Square Capital Management, said on X that Huang is an "incredible human" and "even incredible humans make mistakes." He wrote: "He takes full responsibility as he should. We should all support him and his family. Onward."
In another post, Ackman added: "I am not suggesting he gets a free pass. If indeed this is more than an affair, then it is an obviously a real problem."
Shaun Maguire, a partner at Sequoia Capital, wrote on X that Huang "did something incredibly dumb" that was "bad for America."
But he called Huang "one of the greatest entrepreneurs of this generation," and "irreplaceable for America's AI leadership."
Elon Musk, the founder of xAI which is now part of his company SpaceX, shared Maguire’s post on X, writing: "I agree."
Contact Newsweek editors for this story: Robert Greenall and Ben Kelly
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