$4.5tn Nvidia Faces Major Storm After CEO Admits to Inappropriate Relationship with Alleged Spy

• Company’s shares slide, trim $220bn as board begins probe 

•China denies spying claim, calls it smear campaign

Emmanuel Addeh in Abuja

Nvidia, the world’s most valuable listed company, came under pressure on Monday after its board opened an independent investigation into Chief Executive, Jensen Huang, over his relationship with a business executive US officials have linked to alleged Chinese intelligence.

The stock, which trades as NVDA, fell more than 4 per cent in early trading to about $178, trimming about $220 billion from its market value.

The company, which was valued at about $4.50 trillion on Friday, is now worth about $4.28 trillion, still ahead of any other public company.

The probe followed a New York Times investigation published at the weekend. The paper reported that Huang had an intimate relationship with Alice Huang, also known as Huang Le, an executive at Megaspeed, a Singapore based data centre operator. The two are not related.

Megaspeed had emerged in the past two years as one of Nvidia’s largest customers in Southeast Asia, with purchases estimated at more than $4.8 billion.

US authorities are already looking into whether chips sold to the company were diverted to China in breach of export controls that bar the sale of Nvidia’s most advanced AI processors to Chinese entities.

Nvidia’s board said that a committee of independent directors, supported by outside counsel, will examine whether Huang was targeted as part of a foreign intelligence effort.

“The board prioritises US national and economic security, which is paramount to the interests of Nvidia and its shareholders. While the board has no reason to believe that either national security or Nvidia secrets were compromised, the board’s inquiry will examine all available information,” the board said.

Huang, 63, who co founded Nvidia in 1993 and has led its rise as the core supplier for the AI boom, told staff in an email on Sunday that he had been unfaithful to his wife.

“I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry. I take full responsibility for what I did and the hurt I caused,” he stressed.

“Regarding the national security concerns raised in news reports, Nvidia’s Board of Directors has initiated an independent investigation. I support the investigation and will cooperate fully,” he added.

The case lands at a sensitive moment for Nvidia and the broader AI trade. The company sits at the centre of US efforts to maintain a lead in artificial intelligence while restricting China’s access to cutting edge computing.

Washington has tightened rules since 2022 to block sales of Nvidia’s most powerful chips to China, and Singapore has become a focal point for enforcement.

Investors are also watching Nvidia’s balance sheet shift. The company has moved beyond being just a chip seller to financing parts of its customer ecosystem, with financial commitments under its neocloud partner programme rising to $165 billion in the last quarter.

In Beijing, foreign ministry spokesman Guo Jiakun on Monday dismissed any Chinese role.

“The so called Chinese spy allegation is groundless. It is nothing but a smear against China,” he said at a regular briefing.

Nvidia is due to report third quarter results next week, on November 17.

The American chip company  powers most of the world’s artificial intelligence. Founded in 1993 in California by  Huang and two engineers, it started making graphics chips for video games but later discovered those same chips were ideal for training AI models.

When the AI boom took off in 2022, demand for its processors exploded. Its H100, Blackwell and now Rubin chips became the workhorse of AI data centres, turning Nvidia from a niche gaming supplier into the world’s most valuable listed company, worth more than $4.5 trillion at its peak with annual revenue above $130 billion.

Because its technology is considered strategic, the US government since 2022 has barred it from selling its most advanced chips to China, a restriction that has put its sales routes through Southeast Asia under close scrutiny.