New Delhi: The Nvidia stock price has fallen two days in a row, and CEO has been summoned to appear before his own board for a hearing. It started with an admission on a personal level, which has since morphed into a business, political and legal issue.
It was a gradual process of the story getting published in New York Times over a couple of weeks. Over the course of approximately two weeks it was published in New York times. They also alleged that Jensen Huang had an affair with another female named Alice Huang, who they said was a spy for China, and that Huang was being targeted by Chinese intelligence to get “premium AI chips” from Nvidia into China. They have no familial connection, and the Crawfords do not share a last name.
On the weekend, Huang confessed to an extramarital affair, and confessed that the reports and the national security issues surrounding them compelled Nvidia’s board to launch an investigation. Neither he nor the company disclosed the woman’s name, but the Times cited a U.S. intelligence assessment that she was gathering intelligence for Beijing. There is no criminal record of either person.
Alice Huang is a part of Nvidia’s customer base at Megaspeed, a data center firm. Her Singapore-based company acquired almost $5 billion worth of Nvidia chip technology, NPR reported.
Nvidia’s board shared the news on Sunday. Huang is fully supportive of it and is willing to cooperate, the company said. CNBC says the board hired the law firm Wachtell Lipton to lead the investigation, while a company spokesperson says Huang plans to continue operating Nvidia “without interruption. Huang was “deeply sorry,” he said in an e-mail.
Investors didn’t wait for the findings. Nvidia has been closing down 4.27% lower on Monday and 5.47% lower on Tuesday. A federal-juvenile lawsuit on behalf of shareholders of Nvidia and Huang was also filed in San Jose. It was a “black eye moment” for Huang, but Nvidia is still two to three years ahead in AI chips, analyst Dan Ives said. Another concern is presented: CNBC coverage of the issue points to a lack of succession plan in place.
A nub of Nvidia shares sinks 4% following questions about the Nvidia CEO’s relationship with said Chinese spy.
Washington is listening. Huang’s testimony before Congress on Nov. 18 was requested by Republican lawmakers, who said the allegations have raised “serious questions” about China’s access to sensitive U.S. technology. Republican John Moolenaar, chairman of the House China committee, is asking for answers, too.
Beijing is back on defense. Foreign Ministry issuing state spokesman groupo jiakun said Monday that the “so-called Chinese spy narrative” is untrue. Guo says it is “smears against China” as well.
This is a timing thing as a result of Huang’s long stints on China policy. He is cited as a “close adviser” of President Trump on “AI trade,” and has lobbied multiple times to ease Nvidia restrictions on exporting its most advanced chips, known as Blackwell, to China. He marched to Beijing with Trump earlier this year and in May said when asked by CNBC that Nvidia had mostly lost out to Huawei in China. His China advocacy will now be read by the critics differently properly or improperly.
There are still many questions to be answered. There is no scheduled date for the review by the board. Whether Huang knew what, if anything, Huang was doing at Alice Huang’s alleged intelligence outfit or if any chips were impacted, or if the U.S. has its own investigation into Huang is not known. A bulk of the spy allegations are based on the Times report on U.S. intelligence information which Beijing denies and which has never been challenged in court.
Huang has been at the helm since 1993 and Nvidia is the most successful and valuable face of the AI boom. It remains to be seen whether he will continue in his role, but it will likely depend on what the board’s lawyers discover and his later this month testimony before Congress.
