Nvidia Board Probes CEO Huang as Shares Fall 5%
Nvidia's board is now investigating its own chief executive. Investors treated that as a risk to the business, and Nvidia shares fell 5% on Monday.
Who is standing behind Huang
President Donald Trump praised Huang's leadership on Sunday. He also said the two had not discussed the investigation.
Shaun Maguire, a partner at Sequoia, defended Huang in a post on X. He wrote that Huang is irreplaceable for America's AI leadership. Elon Musk reshared the post and said he agreed.
What investors fear
The probe has raised questions about whether Huang stays in the job. Dan Ives of Yorkville Ives & Co. called talk of replacing him "comedy". He added that the episode is still a "game changer" for the company, though he does not think it changes Nvidia's lead of two to three years over China in AI chips.
His worry, as he framed it, is investor uncertainty. The Street would probably expect Huang to remain, Ives said, but with a board investigation under way "anything could happen".
Joachim Klement of Panmure Liberum said the damage is so far limited to Nvidia. If Huang's position were put at risk, he said, Nvidia might scale back its support for other companies in Asia and the U.S. That could spread the pressure to other chip stocks.
So far, other chip names went the other way. AMD, Marvell, Arm, Intel and Qualcomm all rose on Monday, and Asian tech shares bounced back from Friday's losses. The previous week had been rough for the sector, with the data center build-out under doubt after the Democrats took Congress.
What the board is reviewing
The review follows reports in The New York Times and The Financial Times. They said U.S. intelligence agencies believe Alice Huang, an executive at the cloud company MegaSpeed, has been passing information to Beijing. The reports described Jensen Huang as the target of a foreign intelligence effort.
In an email to staff, Huang said he had "fallen short" of his duty to colleagues, the board, partners and shareholders. He also wrote that he had been unfaithful to his wife and was deeply sorry.
Nvidia said in a Sunday statement that the board launched an independent investigation. Huang supports the review and has promised to cooperate, the company said.
China's Foreign Ministry spokesperson Guo Jiakun said on Monday that the "so-called Chinese spy narrative" had no basis, according to Reuters.
Dates ahead
Nvidia reports third-quarter earnings on Nov. 17. It will also hold a major conference in Washington, D.C., at the end of the month. The report does not say when the review will end.
Source: CNBC