Nvidia shares fall 5% amid spying scandal

Nvidia shares fell nearly 5% ahead of trading following spying allegations against the company's CEO, Jensen Huang. The board of directors announced that it opened an independent investigation to investigate whether the head of the world's largest artificial intelligence accelerator manufacturer was the target of a foreign intelligence operation. However, what really worries investors is that there is no clear successor to Huang, who has been running the company since 1993.

Allegations that led to the investigation

It all started with reports of Huang's close relationship with Alice Huang, the former executive of Singapore's Megaspeed International. According to The New York Times, US intelligence determined that this woman was gathering information for Beijing. Megaspeed had previously been on the radar of US authorities on suspicion of illegally shipping Nvidia's advanced accelerators to China. Moreover, the Nvidia partnership was also emphasized on the company's website.

Huang confirmed that he had an intimate relationship with an unnamed businesswoman. He publicly apologized to his wife and the company. He did not accept that he was involved in espionage activities.

Reactions from Beijing and Washington

China's Ministry of Foreign Affairs denied the allegations. Spokesperson Guo Jiakun said that the remarks about Chinese espionage were groundless and were considered an attempt to denigrate China. State newspaper Global Times attributed such news to an effort to prevent the improvement of China-US relations.

Huang stated that he supports the investigation and is ready to cooperate fully. He also emphasized Nvidia and its commitment to protecting the national security of the United States. Donald Trump supported the head of the company.

Two questions remain: Was Huang aware of possible intelligence activity, and did Nvidia's confidential or strategic information reach third parties? George Chen, head of digital technologies at The Asia Group, said this requires evidence, not guesswork.

Nvidia shares and dependence on a single leader

Huang has been at the center of the company for more than 30 years. Therefore, there is no clear succession plan publicly available. According to the news covering the market reaction, he appointed his children to executive positions. One analyst said Huang's retention in his post limited the decline in Nvidia shares for now. Because if the market had seriously expected him to leave, the loss could have been much heavier.

The scandal comes on top of Nvidia's already rocky relationship with the Chinese market. Huang has repeatedly asked Washington to ease export restrictions. Trump approved the sale of H200 chips to Chinese customers in 2026. It is unclear whether Beijing will allow them to be taken in large volumes.

Nvidia told regulators in August that it sold only a small number of these accelerators to China because of restrictions imposed by Chinese authorities. The outcome of the investigation will be the next decisive development for Nvidia shares.