Nvidia heads for $400 bil. 2-day wipeout as CEO affair fallout deepens

Nvidia's shares faced a significant drop on Tuesday, potentially leading to a $400 billion loss in market value over two trading days. This decline is attributed to mounting concerns over the fallout from CEO Jensen Huang's affair with a Chinese woman suspected of being a spy for Beijing. The CEO's relationship with Alice Huang reportedly facilitated shipments of $7.5 billion worth of Nvidia chips to Chinese firms, according to The Information.

The allegations have raised questions about Nvidia's governance, export-control compliance, and reliance on Huang's leadership. This has intensified investor unease about whether the company's massive spending on artificial intelligence infrastructure will yield adequate returns. Nvidia's shares slipped more than 5% on Tuesday, following a 4.3% decline on Monday, when the company lost $192.08 billion in market value. The potential for further losses stands at around $221 billion if the downward trend continues.

Investors are debating whether this situation is specific to Nvidia or could trigger broader restrictions and disruptions across the AI infrastructure sector.