Nvidia shares tumble amid espionage scandal involving CEO

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Eugene Komchuk

19 min ago

Nvidia shares tumble amid espionage scandal involving CEO — What did Nvidia's CEO do?

Nvidia CEO Jensen Huang has found himself at the center of a major scandal over an affair with a woman whom U.S. intelligence agencies suspect of spying for China. The company's board of directors has launched an independent investigation, triggering a decline in Nvidia shares on alternative trading platforms.

On Sunday, November 8, Nvidia's board of directors announced an independent investigation involving the company's co-founder and CEO, Jensen Huang. The move followed reports by The New York Times and the Financial Times about his relationship with businesswoman Alice Huang, who is suspected by U.S. intelligence agencies of cooperating with Chinese intelligence services.

Alice Huang was previously associated with Megaspeed, a cloud computing company and Nvidia customer. According to U.S. media reports, she was allegedly recruited by China's Ministry of State Security to gather intelligence on the AI chipmaker. Megaspeed itself had previously come under scrutiny over suspicions that it helped Chinese companies circumvent U.S. export restrictions.

Following the reports, Jensen Huang sent a letter to employees admitting that he had been unfaithful to his wife and apologizing to his family. He also pledged to fully cooperate with the investigation.

However, Nvidia's board emphasized that it currently has no reason to believe that the company's trade secrets or U.S. national security have been compromised. Huang will continue to lead Nvidia during the investigation.

The scandal has already attracted the attention of U.S. lawmakers. Three House committee chairs have requested that Huang attend a closed-door briefing on November 18. U.S. President Donald Trump, meanwhile, publicly backed the Nvidia CEO and expressed support for him remaining in his position.

Nvidia shares continue to decline

News of the investigation triggered a wave of selling in Nvidia shares. According to Bloomberg, the company's stock fell approximately 3.4% to $180 in off-hours trading. On Robinhood, the decline reached 4.2% on Sunday evening.

Nvidia stock perpetual futures traded on the crypto platform Hyperliquid also suffered losses. NVDA-USDC contracts dropped 3.8% to $180, briefly falling as low as $178. The 24-hour trading volume reached approximately $170 million.

The scandal comes at a difficult time for Nvidia. The company's shares have already lost around 22% from their October peak amid investor concerns about massive AI spending by technology corporations and the industry's outlook following the U.S. midterm elections.

Analysts warn that the investigation creates additional risks for a company whose success is closely associated with Huang's leadership. According to eToro analyst Josh Gilbert, any uncertainty surrounding Nvidia's CEO will affect shareholder sentiment.

However, there has been no widespread selloff across other stock markets so far. On Sunday evening, S&P 500 futures gained 0.6%, while Nasdaq 100 futures rose 0.7%. On Monday morning, Japan's Nikkei 225 advanced 3.2%, and South Korea's Kospi climbed 1.7%.

Bitcoin and Ethereum also under pressure

The espionage scandal involving Nvidia's CEO coincided with a fresh wave of selling in the cryptocurrency market. According to CoinDesk, Bitcoin fell to $73,700 late on Sunday, November 8, reaching its lowest level since August. The cryptocurrency later partially recovered its losses.

Ethereum also came under significant pressure. Its price dropped below $2,100 before recovering slightly. Another factor contributing to market instability was U.S. Secretary of State Marco Rubio's statement that negotiations with Iran had stalled. With traditional stock exchanges closed over the weekend, cryptocurrencies were the first to react to the negative headlines.

Sharp price swings triggered massive liquidations of traders' positions. According to CoinGlass, more than $1 billion worth of positions were liquidated over 24 hours, with $913 million coming from long positions. Ethereum traders suffered the largest losses, totaling $448 million, while Bitcoin liquidations reached $272 million. The largest individual liquidation also involved Ethereum and amounted to $48 million.

As a reminder, Nvidia recently unveiled its Vera CPU, designed to improve AI agent performance.

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