Nvidia shares fell about 5% in premarket trading Monday after the chipmaker announced an independent investigation into reports that Chief Executive Jensen Huang had been targeted by a foreign intelligence operation, putting his leadership and the company's security safeguards under scrutiny.
The board said Sunday that a special committee of independent directors, assisted by outside lawyers, would conduct the review. Nvidia expressed confidence in Huang, who will remain chief executive, and said it had found no evidence that trade secrets or national security assets had been compromised.
The investigation follows reports in The New York Times and Financial Times linking Huang to Alice Huang, a businesswoman associated with Nvidia customer Megaspeed. According to those reports, U.S. intelligence agencies concluded that she had passed information to Beijing.
In an email to employees, Jensen Huang acknowledged marital infidelity and pledged to cooperate with the board.
"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," he wrote.
That admission does not establish that Huang knew of or participated in an intelligence operation. China's Foreign Ministry rejected the allegations Monday, with spokesperson Guo Jiakun describing them as "purely unsubstantiated and directed at smearing China."
Nvidia's shares initially declined 4.5% before trading 5.2% lower ahead of the opening bell, according to CNBC. The decline followed a broader technology sell-off the previous week as investors reconsidered spending on data centers after Democrats won control of Congress.
The board review also coincides with a congressional request for information. Three Republican House committee chairmen asked Huang for a closed-door briefing about the reported intelligence links and Nvidia's protections against such threats.
Their Nov. 5 letter proposed a Nov. 18 meeting and asked him to accept or suggest another date by Nov. 11. The request is not a subpoena, and his attendance has not been confirmed.
Bernstein maintained its outperform rating on Nvidia, saying demand for the company's products appeared unlikely to be directly affected. But the brokerage described the investigation as a potential "heavy distraction" and said it could provide "significant ammunition" to lawmakers already scrutinizing the chipmaker.
The episode highlights Nvidia's reliance on Huang, who co-founded the company in 1993 and has led it since. Dan Ives, senior managing director at Yorkville Ives & Co., told CNBC that uncertainty about Huang's future was investors' central concern, even though he considered talk of replacing him implausible.
Joachim Klement, an investment strategist at Panmure Liberum, said the market impact was currently concentrated in Nvidia. A threat to Huang's position could have wider consequences if Nvidia reduced its support for other semiconductor businesses, he said.
President Donald Trump publicly supported Huang on Sunday while saying they had not discussed the investigation.
"He's done an amazing job for our country," Trump told reporters. Sequoia partner Shaun Maguire also defended Huang, and Elon Musk endorsed Maguire's comments on X.
Nvidia is scheduled to report third-quarter fiscal 2027 results on Nov. 17, a day before the proposed congressional briefing. The board has not announced a deadline for completing its review.
