Jensen Huang Loses $7.4 Billion As Nvidia Shares Slide Amid China Spy Allegations, Falls To 10th On Forbes List

Nvidia chief executive Jensen Huang lost an estimated $7.4 billion from his personal fortune within the first 30 minutes of trading on Monday, November 9, as the chipmaker's shares fell amid controversy over his reported relationship with a businesswoman suspected by US intelligence of working for China. The decline pushed Huang down two places, from eighth to tenth, on Forbes' real-time ranking of the world's richest people.

According to Forbes, Huang's estimated net worth fell from $162.2 billion to $154.7 billion, placing him below Berkshire Hathaway chairman Warren Buffett and Oracle co-founder Larry Ellison. Nvidia shares fell as much as 7 per cent in pre-market trading before recovering some losses. By 1.30 pm Eastern Time, the stock was down 5.5 per cent. Huang was the only person among the world's ten richest billionaires to record a decline in wealth that afternoon, Forbes reported.

The fall came on the first trading day after Nvidia announced an independent investigation into the matter. The company's market capitalisation also declined from approximately $4.5 trillion at Friday's close to $4.24 trillion by Monday afternoon. The decline in Huang's estimated wealth was largely linked to the fall in Nvidia's share price, given his substantial ownership stake in the company.

Nvidia Shares Slide As Board Investigates Huang's Reported Relationship

Nvidia's board announced on Sunday that independent directors, assisted by external legal advisers, would examine available information concerning Huang's reported relationship with Alice Huang, a former executive at Singapore-based technology company Megaspeed. The company said it had no reason to believe that its trade secrets or US national security had been compromised.

Huang separately acknowledged in a letter to employees that he had been unfaithful to his wife, apologising to his family, colleagues and the company's board. He said he would cooperate with the investigation. He did not identify the woman involved.

The controversy follows a New York Times report that US intelligence officials believed Alice Huang, also known as Huang Le, had been recruited by China's Ministry of State Security to gather information about the Nvidia chief. She is not related to Jensen Huang. The allegations have not been publicly established, and Nvidia's board has said it has found no reason to believe company secrets or national security were compromised.

Shareholder Lawsuit Adds To Pressure On Nvidia

The controversy has also triggered legal action. On Monday, Nvidia and Huang were sued in a proposed shareholder class action filed in federal court in San Jose, California. The complaint alleges that the company and its chief executive misled investors by failing to disclose information about Huang's reported relationship and the potential risks to Nvidia's reputation and business prospects.

According to Reuters, Nvidia shares closed 4.3 per cent lower on Monday, wiping approximately $190 billion off the company's market value. The lawsuit was filed shortly after the market closed. The allegations in the complaint have not been tested in court.