NVIDIA’s board has launched an independent investigation following reports of possible ties between CEO Jensen Huang and a woman suspected by U.S. intelligence agencies of cooperating with Chinese intelligence. The review comes as NVIDIA shares fell to $176 in premarket trading and analysts warned that a prolonged investigation could affect the company and the broader semiconductor industry.

A committee of independent directors will oversee the investigation with support from external legal counsel. NVIDIA said it currently had no reason to believe that U.S. national security or the company’s corporate secrets had been put at risk, but the board plans to examine all available information.

Huang backed the investigation and pledged to cooperate. The board also expressed confidence in Huang and his management team.

Huang acknowledges relationship

Huang told employees that he had a romantic relationship with a woman linked in several reports to Chinese intelligence. In an internal memo, the 63-year-old executive acknowledged that he had cheated on his wife and caused pain to her and their children.

“There is no excuse for my actions. I deeply regret it,” Huang wrote.

Bloomberg identified the woman as Alice Huang, a former senior executive at Megaspeed International. According to media reports, the U.S. government suspects that a Chinese intelligence service recruited her.

Jensen Huang previously described his connection with her as a standard business relationship, saying she worked for a client in Singapore. He also denied any illegal or improper conduct.

China’s Ministry of Foreign Affairs rejected the allegations against Alice Huang. Ministry spokesperson Guo Jiakun called claims about her ties to Chinese intelligence baseless slander against China, according to journalists.

U.S. President Donald Trump defended Jensen Huang, calling him a good person and saying he should remain NVIDIA’s CEO.

“I didn’t talk to him about it. I just know he’s a good person, but you never know what could happen,” Trump told reporters.

Market reaction

NVIDIA shares, which trade under the NVDA ticker on Nasdaq, fell to $176 in premarket trading, according to TradingView.

The events also triggered a negative reaction in the cryptocurrency market. Bitcoin fell below $74,000, while futures-market liquidations exceeded $1 billion over 24 hours, according to CoinGlass and TradingView data for BTC/USDT on Binance.

Analysts assess potential impact

Ryu Yun Ho, a senior analyst at NH Investment & Securities, said the immediate impact on NVIDIA could be limited because the U.S. government likely knew about the situation for several months. However, he said a prolonged investigation or internal review could delay NVIDIA’s investment decisions, creating risks for South Korean suppliers and the broader semiconductor industry.

Tesla investor and The Future Fund LLC managing partner Gary Black suggested that Huang might not be able to remain CEO. He cited the lack of an obvious internal successor and the potential for uncertainty about NVIDIA’s future leadership to pressure its shares.

Investor Bill Ackman, CEO of Pershing Square, urged observers to distinguish between personal betrayal and a potential national-security threat. He said he hoped there were no circumstances more serious than a romantic relationship but added that Huang should not evade accountability if further facts emerge.

Former PIMCO CEO Mohamed El-Erian pointed to NVIDIA’s outsized role in the technology sector, financial markets and the economy. He said the situation raised questions about corporate governance, key-person risk, national security and geopolitics.

Josh Gilbert, a senior analyst at eToro, called the investigation poorly timed ahead of NVIDIA’s financial report on Nov. 17. He said the situation could weigh on investor sentiment, although its long-term impact would depend on whether it resulted in leadership changes.

Chris Weston, head of research at Pepperstone, took a more cautious view of the possibility that Huang could step down. He said a CEO replacement was unlikely given Huang’s role in building NVIDIA and the artificial-intelligence industry, but confirmation that the woman had ties to intelligence services would significantly complicate the situation.

Source: Incrypted