Nvidia stock plummeted more than 4% Monday after CEO Jensen Huang admitted to having an affair with an alleged Chinese spy – sparking fears the top exec could be ousted from the semiconductor giant known for making cutting-edge AI chips.
The stock closed down $7.97 at $178.67 a share. Other chip stocks, meanwhile, helped push the S&P 500 and Nasdaq higher as Nvidia’s rivals benefited from the scandal. Chipmakers Broadcom and AMD rose 9% and 13%, respectively.
Nvidia’s board launched an investigation after Huang on Sunday admitted to having an affair with Alice Huang – no relation – an executive at Megaspeed, a Singapore-based company that bought billions of dollars worth of chips from Nvidia. A secret, months-old State Department memo had found that she was allegedly recruited by China’s Ministry of State Security.
Part of the board’s probe will include whether Huang intentionally misled shareholders and the board on their relationship, and if what he was concealing would have impacted the company’s value – but many investors hope he’ll survive the scandal.
Huang has been leading Nvidia – one of the world’s most valuable companies, worth more than $4 trillion – for more than 30 years. He’s become synonymous with the AI boom itself, and currently has 60 direct reports, no clear successor and a close relationship with President Trump.
Former SEC Chair Gary Gensler warned that Huang’s repeated denial of any inappropriate ties to Alice Huang could “look like it was material to pricing because look what is happening to stock prices.
“The board is going to have a hard challenge here. They’ll have some tough choices,” he told CNBC’s “Squawk Box.”
Dan Ives, tech analyst and partner at Yorkville Ives & Co, said despite the wild scandal, any talk of replacing Huang is “comedy” – adding that Nvidia’s chips are about two to three years ahead of Chinese rivals.
“You’re talking about what I would view as the torchbearer – the leader of AI technology – not just in the US but globally,” Ives told CNBC’s “Squawk Box Europe” Monday.
“So I think the fact that we’re in this situation, from an investor perspective, the clear worry is, does Jensen stay on as CEO? The Street would say probably likely, but given the board investigation, anything could happen and that creates a huge uncertainty.”
Here’s the latest on the Nvidia CEO’s affair with an alleged Chinese spy:
Along with being intimately involved with Nvidia’s day-to-day operations, Huang has made it a family affair. His two children – daughter Madison Huang and son Spencer Huang, along with Madison’s husband, Nico Caprez – work at Nvidia.
Any investigation result that would require disentangling Jensen Huang from the company would be difficult.
Trump also quickly came to his defense Sunday night while speaking with reporters, calling the Nvidia boss an “honorable guy” and a “fine person,” saying: “He’s done an amazing job for our country.”
“I think he probably has an excuse for it. You have to hear it,” the president said, adding that he hadn’t yet spoken to the CEO.
In a Sunday email to staffers, Huang started with an apology to his family, writing: “To my wife and family: I love you. I know an apology cannot undo what I have done. I hope our family will heal and that, over time, I can earn back your trust.”
He also apologized to his colleagues, board members, partners and shareholders, saying he had “fallen short” of his responsibilities and that they “deserve better.”
“I am fully committed to Nvidia and will work to earn back your confidence,” Huang wrote.
The company said its board had launched an independent investigation following reports that Huang was the target of a “foreign intelligence effort.” Huang “fully supports the review and has committed to cooperating with it,” Nvidia said in a statement.
It is unclear how long the affair lasted, though the pair were pictured together at a bar in Taipei in 2024.
China has denied that Huang was targeted in a spying plot.
Recent years have seen Nvidia emerge as a powerful player in the global AI race, developing its semiconductors to handle complex AI tasks before any rivals – and thus securing a massive lead in chip sales. Nvidia became the world’s most valuable company in June 2024, though Apple has at times surpassed it.
As Nvidia’s market cap dropped from $4.5 trillion to about $4.3 trillion on Monday, Apple again took the throne.
Amid the stunning success, Huang has repeatedly been invited to the White House by Trump. The CEO sat at the head table during a state dinner for Chinese leader Xi Jinping in September.
In December 2025, Trump approved the sale of Nvidia’s advanced H200 chips to China, with the feds collecting a fee for each chip. The Biden administration had halted such exports over national security concerns, arguing Beijing could use the chips to break ahead in the AI race.
Huang has cultivated a close relationship with Trump, reportedly attending a top-dollar donors’ dinner at Mar-a-Lago, Fla., last year with his wife and personally lobbying the president to allow the sale of chips to China.
Nvidia and Apple subsequently announced donations of $25 million each to Trump’s White House ballroom project, according to the Washington Post.