Nvidia has lost about $430bn (£322bn) in market value in two days, after shares fell nearly 10% across Monday and Tuesday.
The fall followed the company’s announcement that it had launched an investigation into claims that chief executive Jensen Huang was the “target of a foreign intelligence effort”.
Republican Senator Kevin Cramer, a member of the Senate Banking Committee, called on Mr Huang to step down, according to Politico on Tuesday. “The potential for extortion is so tremendous that something as sensitive as Nvidia chips, I just think he’s got to go,” he said.
Reports on Tuesday claimed the relationship aided at least $7.5bn (£5.62bn) in Nvidia chip shipments to China, and that US Secretary of State Marco Rubio had previously briefed President Donald Trump on the affair. A White House official has disputed those claims.
Reuters reported on Wednesday that a Chinese university with deep ties to the country’s armed forces had bought Nvidia’s powerful H200 AI chips last month via a third party, despite the chips being on a US export blacklist.
Mr Huang admitted in an open letter posted on Nvidia’s website to having an extramarital affair with a business executive, whom he did not name, and apologised to his wife. He said he would “cooperate fully” with the company’s investigation and was “committed to protecting Nvidia and supporting America’s national security”. He is 63 and owns 3.6% of Nvidia.
Nvidia said it had “no reason to believe that either national security or Nvidia secrets were compromised”.
The New York Times reported Mr Huang had a close relationship with Alice Huang, a former executive from Singapore-based tech company Megaspeed, who allegedly passed information to China. US intelligence determined she was gathering information for Beijing. China has described the claims as “unsubstantiated” and a “smear”. Alice Huang is no relation to Jensen Huang.
On Monday, Mr Trump said the FBI was looking into the allegations, adding that he had spoken to Mr Huang, who he insisted was a “very honourable man” who “had absolutely no idea that the person in question was a spy”.
Most experts do not expect Mr Huang to step down. Bernstein analyst Stacy Rasgon said: “Nvidia is not an ordinary company and Jensen is not an ordinary CEO.”
Some shareholders have filed a proposed class action lawsuit against Nvidia, accusing the company of defrauding investors by concealing Mr Huang’s ties to the suspected Chinese spy.
Nvidia is the world’s biggest chipmaker and powers ChatGPT and Google’s Gemini. Restrictions mean Nvidia is effectively blocked from selling its advanced H200 chips to Chinese firms. Mr Huang has lobbied Washington to loosen limits, winning Mr Trump’s approval for selling H200 chips this year. Mr Trump is set to meet China’s leader Xi Jinping at the APEC summit next week and did not confirm whether he would discuss the situation.
Source: Sky News
