Nvidia shares tumble 5.75% as probe into alleged China-linked operation targets Jensen Huang

Nvidia shares fell sharply in out-of-hours trading on Monday after the US semiconductor giant launched an investigation into whether its chief executive, Jensen Huang, had been targeted by a foreign intelligence operation involving a Chinese businesswoman.

The controversy has put the leadership of the world's most valuable chipmaker under scrutiny, with investors weighing the potential implications for a company central to the global artificial intelligence (AI) boom.

Nvidia-linked perpetual futures on the Hyperliquid platform and after-hours trading on the Blue Ocean Alternative Trading System (BOATS) were around USD 175.97 at the time of reporting. This represented a decline of USD 10.74, or 5.75 per cent, from the company's Friday closing price of USD 186.64 on the Nasdaq.

The fall came after Nvidia's board announced an independent investigation on Sunday. The review will examine reports that Huang had a close relationship with a Chinese businesswoman who was allegedly involved in passing sensitive information to Beijing.

Nvidia board launches independent investigation

The investigation follows reports concerning Huang's association with Alice Huang, an unrelated former executive of Singapore-based company Megaspeed. US authorities had reportedly investigated the businesswoman and identified her as an intelligence asset.

Megaspeed, which purchases AI chips from Nvidia, has also faced scrutiny over suspicions that it helped Beijing obtain advanced semiconductor technology restricted from export to China.

Nvidia said its board had no reason to believe that US national security or the company's confidential information had been compromised. It added that a committee of independent directors, assisted by external legal counsel, would oversee the investigation.

Huang has expressed support for the review and committed to cooperating with it. In a message to employees, he acknowledged being unfaithful to his wife and apologised to his family and colleagues, although he did not disclose further details of the relationship.

The company has maintained that Huang remains committed to leading Nvidia without interruption.

The allegations have also drawn attention in Washington. Republican lawmakers in the US House of Representatives have called on Huang to brief Congress this month about the reports and the potential national security implications.

China, meanwhile, has rejected the allegations, describing claims of an intelligence operation involving Huang as unsubstantiated and a smear campaign against Beijing.

Analysts assess impact on Nvidia's leadership and shares

The controversy has added to uncertainty surrounding Nvidia at a time when investors are already questioning the sustainability of spending on AI infrastructure and the pace of data centre expansion.

Chris Weston, head of research at Melbourne-based brokerage Pepperstone, said the developments were unlikely to benefit the company's stock amid existing concerns about investment in data centres.

"The market's probably telling you, now this does no favours to the stock whatsoever in a time when there's a lot of conjecture as to the build out of data centres," Reuters quoted Weston as saying.

However, he suggested that an immediate change in Nvidia's leadership was unlikely.

"If we genuinely thought he was going to step down ... the stock would be down — it would be an absolute bloodbath, to be honest," he said.

Huang's position is particularly significant given his role in building Nvidia into a leading supplier of processors used to develop and operate AI systems. The company's influence across the semiconductor and data centre industries has made the investigation a matter of concern for investors and business partners.

Market analysts have also warned that a prolonged review could delay administrative processes linked to future semiconductor investments and regional shipments. Any disruption to Nvidia's leadership or business relationships could have implications for its international operations.

Huang's daughter cancels South Korea engagements

The fallout has already affected Nvidia's engagements in South Korea, where the company has business relationships with major technology firms.

Madison Huang, Jensen Huang's daughter and an Nvidia executive, cancelled scheduled meetings with South Korean technology companies. The meetings were due to take place during a visit linked to an Nvidia conference in Seoul, with the cancellation attributed to unavoidable internal issues.

The development raised questions about the possible impact of the controversy on Nvidia's engagements with regional partners.

However, South Korea's deputy science minister said contracted deliveries of graphics processing units (GPUs) from Nvidia would remain unaffected.

Nvidia's key Asian semiconductor suppliers also continued to attract investor attention. Shares of Taiwan Semiconductor Manufacturing Company (TSMC), Samsung Electronics and SK Hynix rebounded on Monday following a broader sell-off in AI-related stocks the previous week.

Ackman, Musk and Trump react to controversy

The allegations have prompted reactions from prominent business figures and political leaders in the United States.

Bill Ackman, founder of Pershing Square Capital Management, expressed concern on social media platform X while acknowledging Huang's professional reputation.

"I am hoping for a simple affair, not a risk to our national security," Ackman wrote.

Tesla chief executive Elon Musk also weighed in by agreeing with a post by Sequoia partner Shaun Maguire. Maguire criticised Huang's alleged conduct, saying he had "done something incredibly dumb" that was "bad for America", while describing him as irreplaceable to US leadership in AI.

US President Donald Trump said on Sunday that he had not discussed the matter with Huang. Asked whether action was warranted after intelligence officials initially briefed him, Trump described the Nvidia chief as an honourable person and said his professional record had been strong.

"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," Trump said.

The investigation comes at a sensitive time for Nvidia, whose chips remain central to the expansion of AI infrastructure worldwide. While the company has said it has no reason to believe that its secrets or US national security were compromised, the outcome of the board's review could determine how the allegations affect investor confidence, its leadership and relationships with international partners.