Nvidia shares tumble over investigation into Huang's affair with alleged Chinese spy

Hundreds of billions of dollars have been wiped off the value of Nvidia after the US chipmaker announced an independent investigation would be carried out into its chief executive's affair with an alleged Chinese spy.

The tech firm saw its shares fall by about 6% on Monday after Jensen Huang admitted having an extramarital affair.

Nvidia's probe came after reports that the US believed the Nvidia boss had been targeted in an espionage campaign by China.

However, China has rejected the claims, with its Foreign Ministry saying "allegations about Chinese spies were "entirely groundless, speculative and intended to smear and malign China".

Nvidia said it had no reason to believe the company's secrets or national security were compromised, but a statement by Nvidia's board of directors said it would begin an investigation in "light of recent reporting that founder and chief executive Jensen Huang has been the target of a foreign intelligence effort".

US intelligence officials believe Alice Huang, also known as Huang Le, was a spy for Beijing, according to a New York Times report, external.

The report said Secretary of State Marco Rubio sent a memo to top officials in Washington last spring warning that the Nvidia boss was in a close relationship with a Chinese spy.

Alice Huang was managing director of Singaporean company Megaspeed, which has had dealings with Nvidia.

Huang admitted he was "unfaithful" to his wife and apologised for hurting her and their children. He added he was "committed to protecting Nvidia and supporting America's national security" and would cooperate with the investigation.

Following the probe annoucenment, other big tech bosses, including Elon Musk, came out in support of Huang to continue leading the firm.

US President Donald Trump said the Nvidia boss was an "honourable guy".

However, the news of the investigation sparked a sell-off in Nvidia's shares, with about $250bn (£190bn) wiped of the company's value.

A key concern for investors going forward is what would happen to Nvidia if Huang was removed from the company, as Fernandez said there was "no natural successor" to the chief executive.

Huang, unlike other founders in the tech industry, is vulnerable to any move by Nvidia's board of directors to oust him.

He owns only around 3.5% of the company, and Nvidia operates on a single class voting structure, meaning his stake would not be enough to act as a veto power over any board decision.

By contrast, many tech founders who lead their companies, including Mark Zuckerberg of Meta and Musk of Tesla and SpaceX, hold significant percentages of multiple types of stock in their companies.

Fernandez said she does not believe the board will remove Huang as chief executive, unless there is glaring evidence of wrongdoing related to national security or intellectual property, "but I bet they start bringing someone up as his number two, to have there for the future."

The modest fall in its shares mean investors believe it is unlikely he will step down or be removed as chief executive, but that the outcome of the investigation will be closely watched.

Even people who do not directly own shares in Nvidia can be affected by rises and falls in its value. Pensions or savings invested in pots which have stakes in the company through index tracking funds can be impacted, for example.