Nvidia CEO's extramarital affair and spying allegations prompt investigation as stocks plummet.
Chipmaker Nvidia is reeling from a leadership crisis after CEO Jensen Huang admitted in an internal memo to employees that he had cheated on his wife, apologized and set off a chain of events that rattled investors, Bloomberg reports.
The woman at the center of the scandal is Alice Huang, described as a former executive at Megaspeed International. Reports claim that US intelligence agencies suspect her of spying for China - an explosive allegation that has caused a corporate and national security firestorm.
The company's board of directors immediately launched an internal investigation, and the market reacted quickly: shares fell nearly 6% in early European trading.
Nvidia's board tried to reassure investors, insisting there was no reason to believe national security or the company's confidential information had been compromised.
Donald Trump has also publicly endorsed Huang, suggesting that he remain in charge.
The test arrives as:
Shares of Nvidia are down about 22% from their peak in October, as investors worry about the big tech's ability to raise massive AI spending.
The chipmaker is scheduled to report quarterly earnings on Nov. 17, as investors closely monitor whether demand for artificial intelligence chips can sustain its growth.
Analysts warn that the cloud of uncertainty hanging over Huang's fate could pile up even more pressure on Nvidia shares.
China has denied claims that it spied on Jensen Huang.
"The narrative of a so-called Chinese spy is completely baseless slander and defamation," Foreign Ministry spokesman Guo Jiakun said at a regular briefing.