Shares in Nvidia fell on Monday after the artificial intelligence giant said it was opening an investigation into reports its CEO Jensen Huang was the target of a foreign intelligence effort. It comes after shares in Nvidia, one of the world’s most valuable publicly traded companies, and others linked to the artificial intelligence boom lost billions in market value on Thursday over worries that Democrats' huge victory in the midterm elections could slow the construction of AI data centers, before recovering some ground on Wall Street on Friday. Shortly after the stock market opened on Monday, Nvidia prices were $174.21 a share, down more than 6 percent from Friday's Nasdaq closing price of $186.64.
Nvidia is one of the so-called Magnificent Seven technology companies that have driven much of the stock market’s gains in recent years. The announcement of an independent investigation from Nvidia’s board of directors follows a report in The New York Times last month that Huang had an affair with a Chinese businesswoman who allegedly passed information to Beijing. The report said U.S. intelligence agencies had discovered that Huang had a relationship with Alice Huang, a Chinese citizen, and determined that she was a Chinese intelligence asset.
The two are not related, according to the newspaper. Alice Huang was a television reporter in China before she became a top executive at Singapore-based data center company Megaspeed, one of Nvidia’s biggest customers in Southeast Asia. Huang said in a message to Nvidia’s staff, later shared with Newsweek, that he had been unfaithful to his wife and apologized to his family and colleagues, saying he took "full responsibility" for his actions.
He did not name Alice Huang or address her apparent ties to Beijing. However, he did refer to the national security concerns raised in news reports and said he supported the board’s investigation and cooperated with it fully. In a statement, Nvidia’s board of directors said it has "no reason to believe" that either national security or Nvidia secrets were compromised, but that its inquiry would examine all available information.
Huang "fully supports the review and has committed to cooperating with it," the statement said. A spokesperson for Nvidia told Newsweek that the news would not slow the company down. "Jensen is committed to continuing to lead Nvidia as CEO without interruption," the spokesperson said.
China has dismissed allegations of a plot to ensnare Huang. "The 'Chinese spy’ allegation is purely unsubstantiated and directed at smearing China," Ministry of Foreign Affairs spokesperson Guo Jiakun said on Monday. Huang is a close ally of President Donald Trump and a leading figure in the global race for AI supremacy.
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