Nvidia’s value tumbles after ‘honeytrap’ investigation launched, as China denies spying claims – as it happened

Shares of Nvidia tumbled 5% on Monday after the computer chip maker, central to the artificial intelligence race, opened an investigation into reports that its CEO, Jensen Huang, was the “target of a foreign intelligence effort.” Nvidia’s announcement of the investigation on Sunday came after its boss admitted that he had an affair with Alice Huang, an executive at Singapore-based datacenter company Megaspeed, who according to the New York Times, US intelligence determined was gathering information for China. The episode has thrown Jensen Huang’s future at the company – and that of Nvidia itself – up in the air, and raises serious questions about US national security – given Jensen Huang’s close relationship with Donald Trump – and what Alice Huang could have gleaned – and passed on – during this affair. The New York Times reported in October that Trump was briefed last year on intelligence that Huang ‌had a close relationship ‌with a Chinese businesswoman who passed information to ‌Beijing, but the US president did not act on it. Speaking to reporters on Sunday, Trump downplayed the revelations about Huang, who is an influential adviser to the president on artificial intelligence, saying: “I have not spoken to him about it. I just know he’s a fine person, but you never know what is going on. I’m sure, I hope everything’s fine. He’s done such an incredible job.” Trump later added: “I think he’s an honorable guy. I think he probably has an excuse for it.” He said he believed that Huang would and should stay on as CEO. The New York Times also reported on Monday that a US commerce department investigation into Megaspeed – the data company led by Alice Huang – was halted after Nvidia’s general counsel intervened. Tim Teter, Nvidia’s general counsel, reportedly contacted the investigators at commerce department to inform them that their boss, Jeff Kessler – a top official – had given Teter permission to request details about their probe into Megaspeed. The case focused on whether the company was smuggling Nvidia’s artificial intelligence chips into China. According to current and former government officials, and others familiar with the incident, that the NYT spoke to, some viewed Kessler’s interaction with Nvidia as violating government procedure and potentially tainting the investigation. The case was eventually transferred to the US justice department late last year, but questions remain about Kessler’s discussions with Nvidia, and what information he subsequently relayed to Howard Lutnick, the commerce secretary or the wider Trump administration. According to the Times’ sources, the justice department is conducting a criminal inquiry into Megaspeed. US Republican lawmakers expressed alarm over the episode, asking Jensen Huang to give the House foreign affairs and intelligence committees a closed-door briefing next week on Nvidia’s “security protocols against foreign adversary espionage” and his relationship with Alice Huang. She had previously been suspected of smuggling Nvidia chips to China, prompting American officials to surveil and monitor her. Democrat Hakeem Jeffries, currently the House minority leader who is poised to become new Speaker next year, said that he ‌wants restrictions on chips sales to China that in a Senate bill to ‌become law as part of an annual defence bill. “Clearly Congress needs more information,” about what ⁠happened at Nvidia, Jeffries said, adding that there are “real concerns ‌that need to be addressed with respect to the Nvidia situation.” Elon Musk and prominent finance moguls, meanwhile, expressed their support for the embattled Nvidia CEO. Musk posted “I agree” in response to prominent venture capitalist Shaun Maguire’s defense of Huang. Maguire argued the Nvidia CEO “did something incredibly dumb” but that he is “one of the greatest entrepreneurs of this generation”. “Two mistakes don’t make a right, and I believe Jensen is irreplaceable for America’s AI leadership,” Maguire posted. “Let’s also not nuke our AI industry because China ran a successful intel op,” Maguire added in a separate post.Bill Ackman, the US hedge fund manager and pro-Trump billionaire, meanwhile, suggested that Huang is “human” and deserves public support over the affair. Ackman followed up with another post later clarifying that he wasn’t suggesting Huang “gets a free pass” but that he was “hoping for a simple affair, not a risk to our national security”. There’s a small chance Huang is removed or steps down from the CEO post, wrote Dan Ives, partner and senior managing director at Yorkville Ives + Co., saying that Huang is “not replaceable.” “On the heels of last week’s Blue Tidal Wave this will also increase momentum for more regulatory scrutiny in the Beltway especially around China and chip restrictions at a time the AI Arms Race is heating up into its next gear between the US and China,” Ives wrote. The company’s board said in a statement on Sunday that, while it has no reason to believe that either US national security or Nvidia secrets were compromised, its inquiry will examine all available information. “The Board prioritizes US national and economic security, which is paramount to the interests of NVIDIA and its shareholders,” the company said. “The Board has confidence in Jensen and his leadership team and will provide further updates as appropriate.” Briefing.com analyst Patrick O’Hare said that Nvidia was being treated as a one-off story by investors for the moment. “In other words, the stock is being penalised for Jensen Huang’s personal transgression, which has invited a great deal of uncertainty into the mix, but the market isn’t caught up in the notion that this situation is going to have a systemic domino effect,” he said. The investigation also follows a rough few days on Wall Street for AI tech firms, particularly Nvidia. A sell-off of tech stocks that began earlier this month and gained steam with disappointing earnings led to a total decline of nearly $1tn in value off the tech-heavy Nasdaq exchange in one week and erased about $2tn in a month. A drop of 3.1% for Nvidia, previously worth about $5tn, whose chips have made it the poster child of the AI frenzy, was the heaviest force pulling the S&P 500 downward recently. Over in the US Congress, Hakeem Jeffries, currently the House minority leader who is poised to become its new Speaker next year, has said ⁠that Congress ⁠needs answers after reports emerged ⁠Nvidia CEO Jensen Huang had been targeted ⁠by a foreign intelligence ‌effort. Jeffries ‌also said he ‌wants restrictions on chips sales to China that in a Senate bill to ‌become law as part of an annual defence bill. “Clearly Congress needs more information,” about what ⁠happened at Nvidia, Jeffries said, adding that there are “real concerns ‌that need to be addressed with respect to the Nvidia situation.” Aisha Down and Dan Milmo Reports that the boss of a cornerstone company in the global AI boom has been the target of a foreign intelligence effort are a big deal, given Jensen Huang’s close relationship with the US president. Aside from Jensen Huang’s dented personal reputation after admitting to having an affair with Alice Huang – an alleged Chinese spy - what is the scale of the damage done to Nvidia and US national security? The story started to emerge last year when the New York Times and Bloomberg raised questions about a Singapore-based buyer of Nvidia’s powerful chips. There were concerns that Megaspeed was flouting US restrictions on AI chip exports to China by diverting some Nvidia inventory to America’s arch AI rival. Nvidia and Megaspeed denied this. Then last month came a further startling NYT report that Jensen Huang, a Megaspeed executive, had formed a “close relationship” with Ms Huang and that American officials believed she was a Chinese intelligence asset. Donald Trump had been told, but decided not to act on the information. It is now evident that the relationship was more than just close. At the heart of the question of what China might have achieved through Alice Huang is the extremely close relationship between the CEO of the world’s second-most-valuable company and the president of the United States. The New York Times reported on Monday that Nvidia appeared to have successfully leaned on the US commerce department to halt an investigation into potential chip smuggling on the part of Megaspeed. That pressure came through a Trump appointee, who allowed Nvidia to reach out about the case. Further, Trump has met frequently – at least seven times – with the head of Nvidia since the start of his second term. Huang has flown on Air Force One and taken calls from the president during public events. Four of their meetings have touched on one of the most sensitive issues in US-China relationships: the controls that the US has put up around the export of the world’s most advanced AI chips, which are almost entirely sold by Nvidia. The US president first invited Huang to the White House just six days after he was inaugurated, to discuss AI policy and chip exports. The two then met again in July and August of 2025. This was followed by victories for Huang – Trump allowed Nvidia to export previously banned chips to China. Nvidia agreed, in turn, to give the US government 15% of the sales revenue. Five months later, the tech boss appeared to win another startling concession, days after another meeting with Trump. The president agreed to allow the tech boss to export H200s – a far more powerful chip – to China, in exchange for 25% of the revenue. It is not unusual for large technology companies to lobby for their preferred policies in Washington; nor is it unusual for Trump to give access – and favourable deals – to men he likes. But one more thing is now apparent – during this crucial year for his company, Huang was also intimately involved with a reported Chinese spy. The two were first photographed together in mid-2024. Five months after Trump took office is when the two were filmed at the Taipei restaurant. This would have been at the height of Huang’s lobbying push, shortly before Trump agreed to let Nvidia sell the H200s. What could Alice Huang have gleaned – and passed on – during this affair? Plenty. Glimpses into US policy as it was being made, and to Trump’s own chaotic thinking on AI. And perhaps a world of tips beyond the confines of the White House. Huang was a key figure for government after government as they formulated their AI policy. He met world leaders from South Korea to Saudi Arabia that year; he joined the then UK prime minister, Keir Starmer, on stage in London. He would have known the details of the most important tech policy for many governments on Earth – their AI ambitions – because his company was often the only one that could make these ambitions happen. That is certainly true for Britain. For all the intellectual feats of the systems powered by Nvidia technology, it is Huang’s human intelligence that is most valuable to America’s competitors. As we’ve been reporting, shares of Nvidia tumbled more than 5% on Monday after the computer chip maker, central to the artificial intelligence race, opened an investigation into reports that its CEO, Jensen Huang, was the “target of a foreign intelligence effort.” Further to my last post regarding succession at Nvidia, there’s a small chance Huang is removed or steps down from the CEO post, Dan Ives, partner and senior managing director at Yorkville Ives + Co., told the Associated Press that Huang is “not replaceable”. “On the heels of last week’s Blue Tidal Wave [in the US midterm elections] this will also increase momentum for more regulatory scrutiny in the Beltway especially around China and chip restrictions at a time the AI Arms Race is heating up into its next gear between the US and China,” Ives said. Still, Ives said there is a risk, as Huang could be removed as CEO depending on the board’s investigation and that it will remain an overhang on shares near term. Too big – and too well-connected – to sack? One doesn’t have to be overly cynical to think Jensen Huang, the Nvidia boss, starts with one huge advantage as the chipmaker’s board starts its independent investigation into the alleged honeytrap spy scandal. The world of US big tech is not, to put it mildly, strong on checks and balances on a founder’s power. Huang does not enjoy the supercharged voting rights that are par for the course elsewhere – his shareholding is a plain vanilla 3.6%. On the other hand, Nvidia’s board does not appear to have spent much time worrying about succession planning and “key person risk” or other standard concerns of corporate governance wonks outside the US. There isn’t even a Nvidia board member with the title of chair. Instead, a “lead director” is “designated annually by a majority of the independent directors”, which sounds like a formula for ensuring the attention remains wholly focused on Huang, the sole executive member. It’s the American way, of course: the cult of the superstar founder or chief executive runs deep and there is a fair argument that such set-ups encourage adventurous risk-taking in pursuit of grand corporate visions. But such governance arrangements look unsuited to situations where the behaviour of the boss is under scrutiny and the role of the board itself is being examined. The investigation will examine whether Huang “has been the target of a foreign intelligence effort” but the independent directors stressed there is now “no reason to believe that either national security or Nvidia secrets were compromised.” But legitimate questions don’t end there. Did Huang break Nvidia’s internal code of conduct? Did he mislead the board about his relationship with Alice Huang (no relation), the alleged Chinese spy? Was the board aware of US intelligence reports that Ms Huang had been hired by China’s ministry of state security to spy on the Nvidia boss, as reported by the New York Times? What security precautions were in place? Other boards in other countries might have insisted on suspending the boss until all the facts are in. In the meantime, the defence of Huang from elsewhere has begun. “An honourable guy. I think he probably has an excuse for it,” said Donald Trump. “Jensen is irreplaceable for America’s AI leadership,” opined Shaun Maguire, a partner at Sequoia Capital, the powerful Silicon Valley investor. Yes, there is little doubt the US tech and political establishment would like this saga to end up in a series of bland conclusions about an everyday infidelity. Nvidia’s board, however, would be wise not to rely on the “irreplaceable” consensus holding, or the political heat going away. This affair will be trawled over by newly empowered Democrats in Congress because it touches on how forcefully – or not – the administration has been enforcing its own national security restrictions on chip sales to China. This process will go on for months. Huang’s personal relationship with Trump will come under the spotlight like never before. Will the Nvidia boss, even if he is cleared by the board’s investigation, still look so all-conquering by the end? His lobbying clout in Washington will be diminished. And Nvidia’s shareholders, if they’re doing the job properly, will surely insist on far greater visibility on where the company’s chips end up. There may come a point where it is in Nvidia’s own interests to move on from the Jensen Huang era. The 63-year-old deserves all his accolades for spotting the enormous AI opportunity for the GPU chips that originated in the world of video games. The rise of Nvidia has been extraordinary. But over-reliance on one individual is also a business risk. Time for some overdue succession planning – it may be needed. Nvidia’s embattled CEO Jensen Huang has disappeared from the line-up of two tech events he was due to speak at this week, according to Business Insider (paywall). Insider reports: “Ahead of its expected IPO next week, Anthropic is hosting a private CEO forum this week in Montecito. Huang was set to be interviewed by an Anthropic executive on Monday evening, a person familiar with the event told Business Insider. He is no longer expected to attend, according to a second person familiar with the matter.” There is little public information available about Alice Huang, the woman reportedly at the centre of the Jensen Huang honeypot allegations, a fact that has only added fuel to claims she is a Chinese intelligence asset. She was the chief executive of a Singapore-based datacentre company reportedly suspected of evading US export controls and routing Nvidia chips to China. US officials then came to believe she was also a spy for Beijing who was having an affair with Jensen Huang, the chief executive of Nvidia, the chip company critical to US ambitions to stay ahead of China in the AI race. People briefed on the US intelligence told the New York Times they believed Alice Huang was recruited as part of efforts to learn more about American AI chips, and to try to persuade Nvidia to push for its advanced chips to be made available to China. China has denied the allegations, calling them “nothing but smears”. It is unclear exactly when the two Huangs, who are not related, first met. Alice Huang speaks good English and is well connected within the upper echelons of the global AI chip industry, the New York Times wrote, citing people who had met her. Megaspeed, the datacentre company for which she was previously listed as chief executive, still describes itself as “a premier business partner of Nvidia” on LinkedIn. It was in this capacity that the businesswoman was pictured in Jensen Huang’s company several times in 2024 and 2025. One photo from an industry party in 2024, posted by another attending company on LinkedIn, shows the two sitting next to each other on a couch in Taipei. The year after, they were filmed together again in Taipei at a dinner hosted by Jensen Huang during Computex, the island’s top tech expo. Press outside livestreamed footage of the two, seemingly comfortable in each other’s company, with Jensen Huang at one point putting his arm around Alice Huang as she kissed him on the cheek. The two later left the restaurant in the same car, the footage showed. A New York-based short-selling firm first raised concerns publicly about their “uncomfortably close relationship” six months ago. Earlier this year, US officials wrote a memo saying the two Huangs had been romantically involved, the Financial Times reported on Saturday, citing sources who had seen it. On Sunday the Nvidia chief executive sent a company-wide email apologising for an affair. He did not name Alice Huang but said he would cooperate with an investigation “regarding the national security concerns raised in news reports”. Alice Huang’s current whereabouts are unknown, and she has not given a public statement about the allegations. It is unclear what her current relationship is with Megaspeed, though Culper Research, the short-selling firm, quoted an employee in May as saying that contrary to public reporting, Alice Huang was “actually still our boss”. The details of her career before that are difficult to ascertain. Several media outlets have cited a profile matching her name and picture on a Chinese fund database, which listed previous jobs at banks including HSBC and CITIC, as well as roles at Chinese media outlets CCTV and Hunan TV. However, reporters have been unable to confirm any of the details listed. Megaspeed is among a number of south-east Asian firms that buy chips to build facilities and then rent their computing power to companies in China. According to Singapore’s the Straits Times, it was previously known as 7Road International – a Chinese gaming company with ties to state-backed investors. At the time of the rebrand, it was owned by Huang Le Limited and led by Alice Huang, the newspaper said, before the ownership was transferred to another company in 2023. Since late 2024, the US government has reportedly been investigating Megaspeed for helping companies in China sidestep American export restrictions. The New York Times said Singapore questioned Alice Huang during its own investigation into the company, but released her. Nvidia has previously said it has looked into Megaspeed but found no cause for concern. The Guardian has contacted Megaspeed for comment. Donald Trump, Elon Musk and prominent finance moguls have expressed their support for embattled Nvidia CEO Jensen Huang, as the head of the world’s most valuable chip company faces an internal investigation over a romantic relationship with an alleged Chinese spy. “I have not spoken to him about it,” the US president told reporters on Sunday. I just know he’s a fine person, but you never know what is going on. I’m sure, I hope everything’s fine. He’s done such an incredible job. “I think he’s an honorable guy. I think he probably has an excuse for it,” Trump later added, saying he believed that Huang would and should stay on as CEO. Huang’s defenders framed his affair as a personal lapse in judgment rather than evidence of treachery against the United States, which has imposed strict limits on what chips Nvidia can sell to China. As news of the scandal broke over the weekend, Musk and prominent investors shared their support of Huang. Musk posted “I agree” in response to prominent venture capitalist Shaun Maguire’s defense of Huang. “Two mistakes don’t make a right, and I believe Jensen is irreplaceable for America’s AI leadership,” Maguire posted. He stated the Nvidia CEO “did something incredibly dumb” but that he is “one of the greatest entrepreneurs of this generation”. “Let’s also not nuke our AI industry because China ran a successful intel op,” Maguire added in a separate post. Bill Ackman, the US hedge fund manager and pro-Trump billionaire, meanwhile, suggested that Huang is “human” and deserves public support over the affair. “He is an incredible human. Even incredible humans make mistakes,” Ackman posted. “He takes full responsibility as he should. We should all support him and his family. Onward.” Ackman followed up with another post later clarifying that he wasn’t suggesting Huang “gets a free pass” but that he was “hoping for a simple affair, not a risk to our national security”. Investigators at the US commerce department had been looking into a Singaporean company suspected of smuggling Nvidia’s AI chips into China last year, the New York Times reports. The probe came to an abrupt end when it was transferred instead to the justice department, following an email from Nvidia’s general counsel seeking information. The investigation was centred on data centre company Megaspeed, led by an executive now believed to be a Chinese spy who had a relationship with Nvidia’s CEO Jensen Huang. The NYT reports: It is not necessarily unusual for Commerce Department agents working on a case to speak with a company’s representatives about issues involving their firm. But what was unusual was the content of the message. Tim Teter, Nvidia’s general counsel, said that Jeff Kessler, a top official at the department, had given Nvidia permission to reach out about the case. The agents were alarmed that Nvidia had invoked the name of Mr. Kessler, their superior, who was nominated to his role by President Trump. Some viewed Mr. Kessler’s interaction with Nvidia as violating government procedure and potentially tainting the case, according to current and former government officials and others familiar with the incident. Nvidia'’s board said in a statement on Sunday that, while it has no reason to believe that either US national security or Nvidia secrets were compromised, its inquiry will examine all available information. “The Board prioritizes US national and economic security, which is paramount to the interests of NVIDIA and its shareholders,” the company said. “The Board has confidence in Jensen and his leadership team and will provide further updates as appropriate.” Nvidia’s shares pared losses from an 8% slide to now down 6%, extending last week’s selloff ‌and pushing the stock to fresh multi-month lows. At current levels, ‌the chipmaker would lose more than $280 billion in value from its last closing price, Reuters reports. Shares of Nvidia tumbled 5% at the opening bell Monday after the computer chip maker, central to the artificial intelligence race, opened an investigation into reports that CEO Jensen Huang was the “target of a foreign intelligence effort.” Nvidia’s announcement of the investigation on Sunday followed Huang’s acknowledgment that he had been intimate with a business executive who, according to the New York Times, US intelligence determined was gathering information for China. The New York Times reported in October that Donald Trump had been briefed last year on intelligence that Huang ‌had a close relationship ‌with a Chinese businesswoman who passed information to ‌Beijing. Speaking to reporters on Sunday, Trump downplayed the revelations about Huang, who is an influential adviser to the president on artificial intelligence, saying: “I think he’s an honorable guy. I think he probably has an excuse for it.” Republican lawmakers have expressed alarm, asking Huang to give the House foreign affairs and intelligence committees a closed-door briefing next week on Nvidia’s “security protocols against foreign adversary espionage” and his relationship with Alice Huang or Huang Le, an executive at a Singapore-based datacenter company called Megaspeed, who is of no relation to the Nvidia CEO. She had previously been suspected of smuggling Nvidia chips to China, prompting American officials to surveil and monitor her. Axios reported on Sunday, citing a draft email by Huang to employees, that Huang admitted to having a romantic relationship with a suspected Chinese spy and took full ⁠responsibility for his actions. “I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what ‌I did,” Huang said in the draft email also seen by Reuters. Nvidia did not immediately respond to a request for comment on the Axios report. There’s a small chance Huang is removed or steps down from the CEO post, wrote Dan Ives, partner and senior managing director at Yorkville Ives + Co., saying that Huang is “not replaceable.” “On the heels of last week’s Blue Tidal Wave this will also increase momentum for more regulatory scrutiny in the Beltway especially around China and chip restrictions at a time the AI Arms Race is heating up into its next gear between the US and China,” Ives wrote. The company’s board said in a statement on Sunday that, while it has no reason to believe that either US national security or Nvidia secrets were compromised, its inquiry will examine all available information. “The Board prioritizes US national and economic security, which is paramount to the interests of NVIDIA and its shareholders,” the company said. “The Board has confidence in Jensen and his leadership team and will provide further updates as appropriate.” Briefing.com analyst Patrick O’Hare said that Nvidia was being treated as a one-off story by investors for the moment. “In other words, the stock is being penalised for Jensen Huang’s personal transgression, which has invited a great deal of uncertainty into the mix, but the market isn’t caught up in the notion that this situation is going to have a systemic domino effect,” he said. The investigation also follows a rough few days on Wall Street for AI tech firms, particularly Nvidia. A sell-off of tech stocks that began earlier this month and gained steam with disappointing earnings led to a total decline of nearly $1tn in value off the tech-heavy Nasdaq exchange in one week and erased about $2tn in a month. A drop of 3.1% for Nvidia, previously worth about $5tn, whose chips have made it the poster child of the AI frenzy, was the heaviest force pulling the S&P 500 downward recently. Meanwhile, technology analyst Dan Ives, at the investment bank Yorkville Ives, said the crisis would at the very least spark congressional inquiries and “create an overhang on the stock for a myriad of reasons”. “This will add risk to the stock as he is so important to the Nvidia story and strategy globally,” Ives said. “This will also increase major scrutiny regarding selling chips to China, which remains a key battleground issue in DC,” he added. Briefing.com analyst Patrick O’Hare said that Nvidia was being treated as a one-off story by investors for the moment. “In other words, the stock is being penalised for Jensen Huang’s personal transgression, which has invited a great deal of uncertainty into the mix, but the market isn’t caught up in the notion that this situation is going to have a systemic domino effect,” he said. Despite the drag from Nvidia, the Nasdaq Composite share index (which contains companies from across the tech sector) is up 2% in early trading. Nvidia are the top faller on the Dow Jones industrial average (DJIA) in early trading. Despite the chip giant’s troubles, the DJIA has jumped by 661 points, or 1.3%, to 51,947 points in early trading. Twenty three of the 30 stocks who make up the DJIA are in positive territory, with investors cheered by a 4.7% fall in the oil price today. Jensen Huang’s personal fortune has taken a heavy hit too. Nvidia’s CEO owns around 3.61% of the company’s stock. At the end of last week, that stake was worth $162bn. But today’s share price tumble means its value has dropped to $150bn, after Huang admitted cheating on his wife. This morning’s sell-off has pushed Nvidia’s shares down to a seven-month low. Newsflash: Nvidia’s shares have dropped sharply at the start of trading in New York, as Wall Street gives its verdict on the company’s spying scandal. Shares in the chip maker fell by almost 7.5% as soon as the opening bell rang out, as investors respond to the news that CEO Jensen Huang has admitted having an extramarital affair – reportedly with a Chinese spy. That knocked the shares down to $172.75 each, down from $186.64 on Friday night. That, by my maths, wipes $335bn off Nvidia’s valuation, following the board’s decision to launch an independent investigation into whether Jensen Huang has been the target of a foreign intelligence effort. It lowers the company’s value to around $4.16tn, down from $4.5tn on Friday night. More than $200bn could be wiped off Nvidia’s value when Wall Street trading begins, in 15 minutes. The company ended last week worth $4.5tn, making it the most valuable company in the world. So with shares down around 6% in premarket trading, that market cap is set to drop. As if Nvidia didn’t have enough to worry about, it also faces a new challenges from Alphabet. Google’s parent company is rolling out a broader array of artificial intelligence chips, Bloomberg reports, adding: The company is introducing two new variations of its tensor processing units, or TPUs, custom-made semiconductors that help develop and run AI software. The latest chips will address the need for confidential computing and help models access a wider range of information when handling queries. The plot thickens! The Financial Times are reporting that Alice Huang pitched an AI chips deal to China-based investors, touting her ability to secure Nvidia’s coveted GPUs and her commercial relationship with Chinese tech giant Alibaba. They say: In early 2025, Alice Huang and her business partner Kang Wei sought investment for a south-east Asia data centre project worth several hundred million dollars, according to two investors pitched on the deal. The pair said they had “no problem securing GPUs” as a key pillar of the deal and cited Alibaba as a client of the project, according to one investor present. As covered earlier (here), a US hedge fund claimed six months ago that Alibaba had been secretly funding Megaspeed – Alice Huang’s Singapore-based cloud computing company…. Polymarket are running a prediction market on whether Jensen Huang will resign, or be removed, by the end of the year. It’s currently running at 15%, suggesting that Nvidia’s CEO is expected to survive until 2027….. Tom Stevenson, investment director at Fidelity International, says: “Stock markets ended last week digesting one AI-focused crisis and they have started the new one assessing another. “AI has driven markets higher and it has started to drive them lower again. For good or ill, it is certain to be the dominant story for the foreseeable future. “Renewed pressure on Nvidia shares has added to the uncertainty surrounding the sector, just as markets were starting to show tentative signs of stabilising after the most significant wobble to date in the ongoing AI boom. With investors already questioning the scale of spending on AI infrastructure and the returns it will generate, sentiment towards technology stocks remains fragile. The news that Nvidia CEO Jensen Huang had an affair with a suspected Chinese spy is likely to spur Democrats to enforce tighter oversight of the AI sector. With the Democratic party winning control of both chambers of Congress in last week’s midterms, they will soon have investigative powers to look into issues of concern. Delaware Senanor Chris Coons wrote on X on Saturday that “Congress will investigate and get answers” relating to Nvidia, saying: The more I learn about the insane relationship between the Trump Administration, Chinese spies, and AI billionaires, the more I’m convinced there is nothing this administration does that isn’t corrupt. Congress will investigate and get answers. Nvidia is set to miss out on a Wall Street reccovery today. In the futures markets, the tech-focused Nasdaq 100 index is up 1%, extending its recovery on Friday afternoon. The futures contract for the Dow Jones Industrial Average, the famous (but narrow) US stock index is up 1.1%. On the streets of Beijing today, people interviewed by the AFP newswire were mostly unaware of Jensen Huang’s affair and expressed scepticism at claims that he was linked to a Chinese spy. One man surnamed Ma said that he did not think Huang’s affair was “a big deal”, doubting the incident would affect a potential meeting between Chinese President Xi Jinping and US President Donald Trump on the sidelines of the APEC summit next week. Wen, a 56-year-old retiree, told AFP it was “a real shame” for Huang to have been caught cheating, as the entrepreneur is widely admired in China for his success in an “extremely critical” part of the tech industry. The White House also has questions to answer about the Nvidia crisis. The New York Times reported on Sunday that US secretary of state Marco Rubio drafted a memo which circulated among top policymakers in the Trump administration, citing intelligence that Nvidia’s chief executive, Jensen Huang, was in a close relationship with a Chinese spy. The memo was circulated to administration officials with high-level security clearances ahead of Donald Trump’s trip to China in May. Huang was initially left off the list of major business and tech executives invited to join Trump in China, but then added after media coverage about his absence. A New York-based short-selling firm raised concerns about the chipmaker’s business in China and its chief executive, Jensen Huang six months ago. Back in May, Culper Research released a report which claimed that Nvidia had “a significant China problem”. The report disputed Nvidia’s claim that its business in China went to “zero” after the US introduced trade restrictions on AI chips in April 2025, arguing that Nvidia chips were still reaching China through “sales to non-restricted intermediaries and diversion.” Culper estimated that “over 20% of Nvidia’s FY 2026 compute revenues remained driven by China”, and that the company was still servicing Chinese demand via sales to non-restricted intermediaries and diversion. The report also identified that Huang had maintained “an uncomfortably close relationship with Megaspeed’s Alice Huang, a Chinese national”…. …and claimed that Megaspeed – the Singapore-based cloud computing company – has been secretly financed by Alibaba via a series of apparent shell companies. Culper warned: We are short Nvidia and think shares are headed lower. Nvidia’s shares have indeed fallen since May, when they traded around $225 each. Last Friday they closed at $186, and are expected to drop today. Nvidia’s shares are still expected to drop around 5% when Wall Street opens at 9.30am in New York (or 2.30pm GMT). But while the company has been plunged into unusual uncertainty, Amish Patel, head of equity research at Raymond James, argues that the wider AI industry still presents a big opportunity: “Underlying demand for AI computing power remains exceptionally strong, while constraints around power and data-centre capacity are not going away. That doesn’t mean the risks haven’t increased. The political debate around data-centre development has become more challenging in the US, while the situation around Nvidia creates additional uncertainty. At the same time, policymakers have to balance those concerns against the strategic importance of remaining competitive with China in AI. Nothing we have seen so far changes our fundamental view of the longer-term AI opportunity. While it’s rare for a CEO to be caught up in an alleged spying operation, romantic entanglements involving high-profile executives do happen – and are often career-disrupting. There are several example of chief executives who lost their jobs after conducting workplace relationships. In 2019, for example, McDonald’s chief executive officer, Steve Easterbrook, was forced out of the fast-food giant after violating company policy by engaging in a consensual relationship with an employee. Back in 2012, US defence company Lockheed Martin’s incoming president and chief executive officer resigned over a relationship with a subordinate. European CEOs have faced similar conseqences. In September 2025, Nestlé dismissed its chief executive, Laurent Freixe, after he conducted an “undisclosed romantic relationship” with a subordinate that breached its code of business conduct. And Bernard Looney lost his job as CEO of BP in 2023 after failing to disclose full details of personal relationships with colleagues. These cases aren’t directly comparible to the Nvidia case – Alice Huang doesn’t work for the company, so her relationship with Jensen Huang isn’t a “supervisor-subordinate” one. Technology analyst Dan Ives, of investment bank Yorkville Ives, has dubbed the investigation “a black eye moment” for Jensen Huang. Ives predicted it will at the very least spark multiple congressional inquiries and “create an overhang on the stock for a myriad of reasons.” In the near-term, Huang is expected to keep his job but risks being removed as Nvidia’s CEO depending on the board’s probe, Ives said in a statement. “This will also increase major scrutiny regarding selling chips to China, which remains a key battleground issue in DC.” The controversy surrounding Nvidia CEO Jensen Huang could complicate the recovery in the stock market after last week’s sell-off, warns Daniela Hathorn, senior market analyst at Capital.com. Hathorn explains: Nvidia’s board has stressed that it has no reason to believe company secrets were compromised and continues to express confidence in Huang’s leadership. Nevertheless, shares fell more than 3% in out-of-hours trading, highlighting the potential reputational damage. Given Huang’s central role in Nvidia’s success and the wider AI investment narrative, even speculation about leadership uncertainty could unsettle investors. However, there is currently no confirmed indication that he will step down, and the controversy does not necessarily change the company’s underlying demand outlook. Reminder: the investigation into whether Jensen Huang has been “the target of a foreign intelligence effort” will be overseen by a committee of Nvidia’s independent directors, assisted by “outside independent counsel”. Last night, Nvidia said: The Board prioritizes U.S. national and economic security, which is paramount to the interests of Nvidia and its shareholders. While the Board has no reason to believe that either national security or Nvidia secrets were compromised, the Board’s inquiry will examine all available information. Nvidia’s shares have already taken a hit in Frankfurt. The chipmaker’s shares have dropped by 4.5% on the German stock exchange – a hint of what’s in store when Wall Street opens in just over four hour’s time. Neil Wilson, investor strategist at Saxo UK, says: Markets are trying to figure out what this means for arguably the world’s most important company right now. If Huang is forced to leave, what happens to Nvidia? As others have said, Huang is kind of irreplaceable for US leadership in AI. There’s no upside from this - shares of Nvidia stumbled about 5% in pre-market trade. We just need to wait and see what the investigation throws up. The scandal at Nvidia comes at a sensitive time for the US and China, as US president Donald Trump is expected to travel to China net week for a meeting with the Chinese president Xi Jinping and Russia’s Vladimir Putin. Mao Ning, a spokesperson for the Chinese foreign ministry, said at a press briefing last week in Beijing that China “is in communication with relevant parties regarding a meeting between the three heads of state”, which could take place on the sidelines of the Apec summit in the southern Chinese city of Shenzhen, scheduled for November 18-19. Trump told reporters on Sunday: Well, I’m going to be going to China. and one of the meetings I think will be with President Putin and President Xi, and that’ll be interesting.” …We’ll talk a lot of things, including denuclearisation, but we’ll be talking a lot of things. We’re trying to end the war in Iran.” It looks like it will be a painful day for Nvidia shareholders– the stock is down 5% in pre-market trading, as investors assess the potential risks around Jensen Huang’s affair with an alleged Chinese spy. The company, which is worth $4.5 trillion, is one of the most valuable businesses in the US. Its shares have grown by more than 500% in the past five years alone, as it has benefitted from AI-driven demand for its chips. This year however, its shares are down by about 1% – a fall that is likely to get steeper when the US stock market officially opens this afternoon. Jensen Huang is now likely to face scrutiny over his defence on engaging with China and his criticisms of US chip restrictions. He told Bloomberg last month: I did my best to inform policymakers in the United States of the importance of engaging the Chinese market and making sure that we serve that market for as long as we can. I think we made a mistake. And this mistake is hard to unwind, but I did my best. There are more Chinese AI researchers than any other nation in the world, and many of them working at the labs. I’ve been very clear that even though we compete against China, they’re not our enemies. If we care deeply about the safety of the world with respect to artificial intelligence, then of course we must open dialogues. We must work with them in every possible way. What is Megaspeed, the company where Alice Huang – the woman who is suspected of spying for China – was a senior executive? Megaspeed is a data centre company based in Singapore that buys Nvidia chips, and rents out their computing power to Alibaba and other Chinese businesses. Alice Huang, who is also known as Huang Le and is alleged to have had an affair with Nvidia boss Jensen Huang, helped set the business up as it was spun out from a Chinese gaming enterprise in 2023. The company has come under scrutiny in the US for allegedly smuggling advanced Nvidia chips into China, which would violate US export controls. Nvidia previously launched an internal probe into these allegations, but found that there was no evidence of wrongdoing. In October, Megaspeed told the New York Times that its “current leadership” takes the spying allegations “extremely seriously and is committed to getting to the facts behind these allegations.” It added that “outside counsel has been retained to conduct a thorough internal investigation and has notified the US government that we are fully committed to cooperating. Reports suggest that Megaspeed has bought billions of dollars worth of chips from Nvidia in the past two years. Nvidia’s ‘honeytrap’ scandal could deal a blow to a potential tech rally when the US market opens later, after a bruising sell-off last week. Susannah Streeter, chief investment strategist at the broker Wealth Club, says that while Huang’s reputation may have taken a hit, it would be hard to replace him as boss of one of the most valuable companies in the US. Just when some calm looked set to be restored to markets, the Jensen Huang spy bombshell has hit, threatening to charge the tech sector with fresh volatility… Right now the furore does not look as though it’ll pull him from his throne, given how intertwined Nvidia’s valuation is with his superstar tech status and his position as the architect of its dominance in the semiconductor market. That expectation may reassure investors, that while headline dominating, the affair won’t be a big bump in the road for the company. For now, the repercussions across the wider chip industry look relatively limited although the scandal could disrupt the tech rebound. Nvidia’s Asian suppliers have gained back ground following last week’s brutal sell-off, with Taiwan’s TSMC climbing around 4.7% and South Korea’s SK Hynix and Samsung also making progress. These are important relationships given that TSMC manufactures Nvidia’s advanced AI processors, while SK Hynix supplies the high-bandwidth memory essential to powering them. Samsung is also fighting to secure a bigger slice of that lucrative memory market. Chris Beauchamp, chief market analyst at the broker IG, takes a more cautious view, warning that the news could deal a blow to the tech rally. This market finds itself having to cope with some mad things. Tariffs, Iran and now Huang’s relationship with a suspected spy. This will be one for the history books if the market continues to selloff on such news. …Given the size of the company and its importance to so much of the AI and tech boom this news is going to be of importance to more than just the company and US national security.” European stocks are nudging very slightly higher this morning – the UK’s FTSE 100 is up 0.4%, while the Stoxx Europe 600 is broadly flat. It is a bit early to look at US futures, but hard to resist on a day like today – the tech-heavy Nasdaq looks like it is poised to fall 0.7% when the US stock market opens later this afternoon, as investors digest the news that Nvidia’s boss may have been targeted by a Chinese spy. The blue chip S&P 500 looks like it will be flat. Chris Weston, head of the broker Pepperstone, said: The market’s probably telling you now this does no favours to the stock whatsoever in a time when there’s ‌a lot of conjecture as to the build-out of data centres. Weston added he did not think Huang, whom he described as the “godfather of AI”, would be replaced. If we genuinely thought he was going to step ‌down ... the stock would be down — it would be an absolute bloodbath, to be honest. China has now rejected claims that it had spied on Jensen Huang, chief executive of US chip giant Nvidia, calling the allegations “baseless”. “We have responded to this matter previously. The narrative of a so-called Chinese spy is entirely baseless vilification and smearing,” foreign ministry spokesman Guo Jiakun told a regular briefing, AP reports. Huang is receiving support from some fellow tech executives, including Elon Musk. Musk commented “I agree” on a post by Sequoia partner Shaun Maguire that said Huang “did something incredibly dumb” that was “bad for America” but that “Jensen is irreplaceable for America’s AI leadership”. Mohamed El-Erian, a leading economist and the former CEO of bond-trading giant Pimco, has put his finger on the complexity of the situation: “While Nvidia has sought to reassure us all, there are several layers here, beginning with the unfortunate timing. “For example: The company is systemically important for tech, markets and the economy; Investors tend to struggle to price in key-person and governance issues; and there are fluid national security and geopolitical dynamics.” A Chinese state-run newspaper has denied that Beijing had any link to Nvidia CEO Jensen Huang’s extramarital affair. The Global Times, a nationalist tabloid, said American outlets, in particular the New York Times, were “going crazy” with speculative stories. The paper also accused American media outlets of spreading a fabricated spy narrative and warning the issue could hurt ties. The article says: “All it took were a few photographs showing Asian faces and Nvidia’s previous efforts to push for relaxing trade curbs on China. “This is precisely how American media, which have long styled themselves as ‘objective,’ manufacture stories.” Nvidia’s shares are expected to drop when Wall Street opens later today. Deutsche Bank analyst Jim Reid reports: Asian equity markets are rallying this morning after Wall Street’s rebound on Friday, although concerns surrounding an internal investigation involving Nvidia CEO Jensen Huang are capping gains. The company is down around -3.5% on platforms that provide weekend prices. Shares in some companies at the heart of the AI boom are rising today. Taiwan’s TSMC, the world’s largest contract chipmaker, have risen by 4.7%, for example. SK Hynix, the South Korean chipmaker, is up a more modest 0.35%. Nvidia’s announcement of an independent investigation introduces another uncertainty for semiconductor stocks and the broader AI investment ecosystem, says Naeem Aslam, CIO of Zaye Capital Markets. He adds: European technology manufacturers and semiconductor equipment suppliers remain particularly exposed to developments in American AI spending, meaning any renewed selling pressure on Wall Street could quickly spread across European equity markets. Bloomberg say the scandal is a “humbling moment” for Huang, calling him one of Silicon Valley’s biggest celebrities in recent years. It adds: Huang has crisscrossed the globe promoting artificial intelligence computing — a field his company dominates — drawing throngs of fans swept up in “Jensanity.” His relentless appearances, featuring science lectures, dad jokes and his signature leather jackets, have turned him into AI’s main cheerleader.” Bill Ackman, CEO of investment firm Pershing Square, is hoping that Jensen Huang’s dalliance is merely a ‘simple affair’, not a national security threat. Posting on X, Ackman called for support for Huang and his family, before adding: “I am not suggesting he gets a free pass. If indeed this is more than an affair, then it is obviously a real problem. I like the guy. He has done a lot of good for the world ‌and I hope the damage here is minimal. That is, I am hoping for a simple affair, not a risk to our national security.” US president Donald Trump has offered support to Jensen Huang. Trump told reporters: “I have not spoken to him about it. I just know he’s a fine person, but you never know what is going on. I hope everything’s fine ... I think he’s an honourable guy.” Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. An apparent honeytrap scandal involving the boss of the world’s most valuable company and a suspected Chinese spy is rocking the AI sector. Overnight, Nvidia announced it is launching an independent investigation following reports that founder and CEO Jensen Huang has been the target of “a foreign intelligence effort”. That effort, reports claim, led to Huang conducting a romantic relationship with a Chinese woman, Alice Huang, who was recruited to spy for China’s Ministry of State Security intelligence agency. Last night, Jensen Huang admitted having an affair, telling Nvidia staff: “I owe my family and all of you an apology. “I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.” Jensen Huang added that he was “fully committed to Nvidia” and would work to earn back employees’ confidence. However, the issue goes much further than simply a CEO’s conduct. It falls squarely within Washington’s concerns that it could lose the AI race to China. Alice Huang worked for a Singapore-based datacentre company called Megaspeed, which has been suspected of routing Nvidia chips to China and evading export controls. Jensen Huang has been a critic of those restrictions, arguing in May 2025 that US export controls designed to limit China’s access to AI chips were “a failure”, and had simply encouraged China to develop its own alternatives. The revelation comes just a few days after shares in AI-linked companies tumbled, before a late recovery on Wall Street on Friday. Today, Asia-Pacific markets are staging a recovery – Japan’s Nikkei has jumped by 2.2%, while Taiwan’s TAIEX has surged almost 5%. South Korea’s Kospi is missing out, though, down by 0.6%. The agenda 7am GMT: German trade data Afternoon: Eurogroup meeting of eurozone finance ministers