Nvidia shares fall 5.7% as investigation raises questions over Jensen Huang’s future

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Nvidia shares fell sharply on Monday as questions emerged over CEO Jensen Huang’s future following a board investigation into allegations that China targeted him in an intelligence operation.

The company, which Huang co-founded in 1993, has grown into the world's second-most valuable company, with a market valuation of $4.5 trillion. However, its shares dropped $10.40, or 5.7 per cent, to $176.24 shortly after markets opened, wiping around $247 billion off its market value.

The allegations involve Huang's reported close relationship with Alice Huang, whom US intelligence officials suspect of working for China's Ministry of State Security. On Sunday, Nvidia's board announced an independent investigation into the matter.

Technology analyst Dan Ives said the controversy could trigger congressional inquiries and create further pressure on Nvidia's stock. He also warned that Huang could potentially lose his position depending on the investigation's findings.

Nvidia's board said there was no reason to believe the company's trade secrets or national security had been compromised. Meanwhile, China rejected the allegations, describing them as baseless attempts to defame the country.

Who is Alice Huang?

Alice Huang, also known as Huang Le, previously worked as an executive at Singapore-based data centre company Megaspeed International, whose website highlights its partnership with Nvidia. Neither the company nor Singapore's Ministry of Home Affairs immediately commented on the allegations.

Challenges in replacing Huang

Analysts say replacing the 63-year-old CEO would be difficult because of his central role in Nvidia's growth and global strategy. He owns approximately 3.4 per cent of the company's shares, making him its fifth-largest shareholder.

Daniel Newman, CEO of technology consultancy Futurum, said Nvidia has no publicly known succession plan or obvious replacement for Huang. He compared his importance to the company with Steve Jobs' role at Apple.

Further pressure on AI stocks

The controversy adds to pressure on Nvidia shares, which had already fallen nearly 20 per cent over the previous month amid a broader sell-off in AI-related stocks.

Analysts also warned that the investigation could lead to tighter US restrictions on Nvidia's chip exports to China. One of the key concerns is whether Huang knew about any espionage activities or whether confidential information was compromised.

Huang has previously lobbied US authorities to ease restrictions on chip sales to China. This year, President Donald Trump approved sales of Nvidia's H200 chips to Chinese buyers. Huang had also sought permission to sell the less advanced H20 chips, designed to comply with US export restrictions.

Analyst Adam Crisafulli said the controversy could prompt Washington to impose significantly stricter restrictions on advanced chip exports to China, potentially creating another major challenge for Nvidia.