Jensen Huang: Nvidia's value plummets $430bn in two days, as CEO urged to quit

Nvidia's market value has plummeted by about $430bn (£322bn) in two days after its CEO, Jensen Huang, admitted to having an affair with a woman alleged to be a Chinese spy. 

Shares in the tech giant dropped by nearly 10% across Monday and Tuesday after the company said it had launched an investigation into claims Mr Huang was the "target of a foreign intelligence effort".

On Monday, Donald 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" and "had absolutely no idea that the person in question was a spy".

It comes after a New York Times report alleged Mr Huang had a close relationship with Alice Huang, a former executive from Singapore-based tech company Megaspeed, who allegedly passed information to China.

The newspaper reported that US intelligence determined that the woman was gathering information for Beijing - claims China has described as "unsubstantiated" and a "smear" campaign.

Ms Huang is no relation to Jensen Huang.

Reports on Tuesday claimed that the entrepreneur's relationship with Alice Huang aided at least $7.5bn (£5.62bn) in Nvidia chip shipments to China, and that the US secretary of state Marco Rubio had previously briefed Mr Trump on the affair.

A White House official has disputed those claims.

Further allegations were piling pressure on the company on Wednesday as the Reuters news agency reported 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.

The controversy has raised questions over whether Mr Huang - who owns 3.6% of Nvidia and is referred to by some as "the godfather of AI" - will continue to lead the company.

Republican ‌Senator Kevin Cramer, a member of the Senate Banking Committee, has called on Mr Huang to step down from his role, according to Politico.

"The potential for extortion ​is so ⁠tremendous that ⁠something as sensitive as Nvidia ‌chips, I just think he's got ‌to go," Mr Cramer told the outlet on Tuesday.

However, most experts do not expect Mr Huang to step down, with Bernstein analyst Stacy Rasgon saying: "Nvidia is not an ordinary company and Jensen is not an ordinary CEO."

Nonetheless, 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.

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CEO to 'cooperate fully' with investigation

In an open letter posted on Nvidia's website, Mr Huang admitted to having an extramarital affair with a business executive - although he did not name the woman - and issued an apology to his wife.

The 63-year-old said he would "cooperate fully" with the company's investigation, adding that he was "committed to protecting Nvidia and supporting America's national security".

Nvidia, which produces the dominant computer chips fuelling the AI boom, said it had "no reason to believe that either national security or Nvidia secrets were compromised".

Mr Trump is set to meet with China's leader, Xi Jinping, at the Asia-Pacific Economic Cooperation summit next week, however, the US president did not confirm whether he would discuss the situation with his Chinese counterpart.

"No, I don't think so," Mr Trump said. "I mean, maybe. I'm sure President Xi will ask me about it."

Restrictions in both the US and China mean Nvidia is effectively blocked from selling its advanced H200 chips to Chinese firms, potentially costing it billions in lost sales.

In recent years, Mr Huang has lobbied Washington to loosen limits on sales of Nvidia chips to China, winning Mr Trump's approval for selling its H200 chips this year.

Nvidia, originally a maker of graphics hardware for gamers, is currently the world's biggest chipmaker and powers the likes of ChatGPT and Google's Gemini, as well as the UK's most powerful supercomputer.

China has long sought to become a global leader in AI, with President Xi having set a 2030 deadline to surpass the capabilities of American AI systems.

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