Nvidia's market capitalisation fell from approximately $4.51 trillion on November 6 to $4.01 trillion on Thursday, wiping out nearly US$494 billion
The selloff coincided with reports of Jensen Huang's relationships, allegations involving a woman suspected by US intelligence of links to Chinese intelligence
Huang resigned as Nvidia's CEO and board member on Thursday after 33 years, with CFO Colette Kress appointed interim chief executive
Nvidia lost approximately $490 billion in market capitalisation in less than a week, marking one of the biggest setbacks for the world's leading artificial intelligence chipmaker. The selloff coincided with a series of revelations about alleged extramarital relationships involving its co-founder and chief executive Jensen Huang, concerns about possible Chinese intelligence links and uncertainty over the company's leadership. The crisis culminated in Huang's resignation as president, CEO and board member on Thursday, after 33 years at the helm.
The controversy has also raised questions about Nvidia's corporate governance, its business connections in China and Singapore, and the enforcement of US restrictions on advanced semiconductor exports.
How The Allegations Surfaced
The New York Times reported in October that US officials suspected Alice Huang, a former executive at Singapore-based data centre operator Megaspeed International, of having links to China's Ministry of State Security. The Financial Times reported in November that a US intelligence memo flagged her alleged relationship with Jensen Huang and raised concerns about a possible effort to obtain sensitive information.
Notably, Singapore's Ministry of Home Affairs clarified on Thursday that Alice Huang was not investigated for espionage by its authorities. She was investigated in connection with possible offences involving server purchases and declarations. Singapore said there was insufficient evidence to establish those offences, but issued her a stern warning for providing inaccurate information and barred her from re-entering the country.
The case raised questions about whether Nvidia chips could have been routed to Chinese entities through third-country intermediaries to circumvent US export restrictions.
Why Nvidia's Board Opened An Inquiry
On Sunday, Huang told Nvidia employees that he had been unfaithful to his wife and apologised. He did not identify the person involved. Following the reports about Alice Huang, Nvidia's board announced an independent investigation into whether its chief executive had been targeted by a foreign intelligence operation.
The board said it had no reason to believe that US national security or Nvidia's proprietary information had been compromised. Huang said he supported the investigation and would cooperate.
The scrutiny intensified on Wednesday, when the NYT reported another alleged relationship, this time involving Kimberly Powell, Nvidia's vice-president of healthcare. The Wall Street Journal separately reported that Nvidia's board was preparing to consider Huang's future at the company.
How The Selloff Unfolded
Nvidia shares fell 4.3% on November 9 and another 5.5% on Tuesday, according to CBS News. The stock recovered on Wednesday, closing at $173.73, before falling in after-hours trading following reports about Powell and the board's deliberations.
On Thursday, Nvidia shares fell as much as 14.3% in early trading, touching $148.80, before recovering to close at $166.19, down 4.3% for the day. The company's market capitalisation fell from around $4.50 trillion on November 6 to around $4.01 trillion on Thursday, a decline of roughly $490 billion.
The decline coincided with the allegations and leadership uncertainty, although the entire loss cannot be attributed to the controversy. Nvidia shares had also been under pressure amid wider concerns about technology valuations and the sustainability of artificial intelligence spending.
Third Affair Reported After Huang's Exit
The controversy did not end with Huang's resignation. A report by news agency Reuters, published after his departure, said that Huang had an intimate relationship with another Nvidia employee.
Reuters did not identify the employee and said attempts to reach her were unsuccessful. t brings the number of publicly reported relationships to three, although the latest allegation has not been independently established.
Who Will Lead Nvidia Now?
Nvidia appointed chief financial officer Colette Kress as interim CEO following Huang's departure. Harvey C Jones, a longtime director, was appointed the company's first board chair. The board is considering internal and external candidates for a permanent successor.
Huang co-founded Nvidia in 1993 and transformed it from a graphics-chip manufacturer into a leading supplier of processors used in artificial intelligence systems. His departure raises questions about succession at a company central to the global AI industry, even as the board's investigation and wider national security concerns continue.
