Nvidia heads for US$470bil two-day wipeout as CEO affair fallout deepens

Nvidia's shares plummeted on Tuesday, potentially losing over US$470 billion in market value over two days. This dramatic decline is attributed to concerns surrounding the fallout from CEO Jensen Huang's alleged affair with Alice Huang, a Chinese businesswoman suspected of being a Chinese spy. The Information reported that Jensen Huang's relationship with Alice Huang facilitated shipments of at least US$7.5 billion worth of Nvidia chips to Chinese companies.

The CEO's board launched an internal investigation, and independent directors have retained former US Attorney Joon Kim and law firm Wachtell, Lipton, Rosen & Katz to lead the inquiry. The FBI is also investigating whether Huang was the target of a foreign intelligence operation. Huang has admitted to being unfaithful to his wife but has not provided details about the relationship.

This scandal has heightened scrutiny of Nvidia's governance, export-control compliance, and dependence on Huang's leadership, adding to investor worries about whether the company's massive investments in AI infrastructure will yield sufficient returns. Nvidia's shares dropped more than 6% following a 4.3% decline on Monday, briefly allowing Microsoft to overtake Nvidia as the world's second most valuable company since June 2025.

The debate among analysts is whether this setback is specific to Nvidia or could trigger broader restrictions and disruption in the AI infrastructure sector. Nvidia's reliance on Alice Huang's network of companies in China and Singapore, which acquired chips and operated data centers, allowed about 240,000 H100, H200, and some A100 chips to be delivered to China despite US export restrictions.