Nvidia shares fell following a scandal involving espionage allegations against Jensen Huang

Nvidia shares fell sharply with over 4% on Monday on both American and European stock exchanges, with losses already visible during pre-market trading, after the company launched an internal investigation to determine whether CEO Jensen Huang had been targeted by a foreign intelligence operation. The investigation has fueled uncertainty over his future at the helm of the American semiconductor giant, according to Reuters.The investigation was initiated following media reports that Huang had maintained a close relationship with a businesswoman of Chinese origin, suspected of passing information to authorities in Beijing. In a communication addressed to Nvidia employees, the CEO admitted that he had been unfaithful to his wife, without providing details about the relationship.

The investigation, announced on Sunday, has drawn investors' attention to the stability of Nvidia's leadership, given the company's central position in the development of global artificial intelligence infrastructure and Jensen Huang's reputation as one of the main promoters of the industry's expansion.

Known for his public appearances wearing a leather jacket, Huang enjoys popularity comparable to that of a celebrity, particularly in Asia, where he frequently meets admirers, takes photographs and signs autographs.

The effects of the investigation were also felt in South Korea, where Madison Huang, the CEO's daughter and an Nvidia executive herself, canceled her scheduled visit to Seoul for a company conference that was due to begin on Monday. The information was confirmed by representatives of South Korean companies with which she had scheduled meetings.

Nvidia risks losing approximately $270 billion in market capitalization

Nvidia shares lost more than 6% during Monday's trading on the Frankfurt stock exchange, continuing the downward trend from the previous week and reaching new lows for the past several months.

At those trading levels, the company risked recording a decline in market value of approximately $270 billion compared with Friday's closing price, according to calculations based on LSEG Datastream data.

Chris Weston, head of research at Melbourne-based brokerage firm Pepperstone, believes the market's reaction reflects investors' concerns at a time when numerous questions already exist regarding the pace of data center development.

The analyst considers the investigation an additional source of pressure on Nvidia shares but does not believe Huang's replacement is likely, describing him as the "godfather of artificial intelligence."

According to Weston, if investors genuinely believed that the CEO was about to leave his position, the stock market reaction would be much more severe, and the company's shares would record considerably greater losses.

Alleged relationship with a woman suspected of ties to Chinese intelligence services

The New York Times reported last month that Jensen Huang had allegedly been involved in a relationship with Alice Huang, a former executive at Singapore-based Megaspeed, to whom he is not related.

According to the American publication, Alice Huang had allegedly been investigated by United States authorities, who reportedly concluded that she was acting as an agent of Chinese intelligence services.

Beijing rejected the allegations. Chinese Foreign Ministry spokesperson Guo Jiakun told journalists that the alleged involvement of a Chinese spy was an unfounded accusation intended to defame and discredit.

Megaspeed representatives did not immediately respond to requests for comment sent on Monday, which was a public holiday in Singapore.

Alice Huang also did not respond to requests from The New York Times last month, when the first reports about the alleged relationship were published. Reuters stated that it had been unable to establish her whereabouts in order to request her point of view.

Nvidia's Asian suppliers were not affected by the scandal

In contrast to Nvidia's negative performance, shares of its main Asian semiconductor suppliers rose on Monday, recovering part of the losses recorded last week, when the artificial intelligence-related sector was affected by a wave of selling.

Shares of Taiwan Semiconductor Manufacturing Company (TSMC) gained 6.5%, while Samsung Electronics and SK Hynix shares advanced by 2.9% and 4.7%, respectively.

The controversy surrounding Nvidia's CEO also prompted reactions from prominent figures in the American business community.

Billionaire investor Bill Ackman, founder of Pershing Square Capital Management, wrote on platform X that Jensen Huang is an extraordinary person but warned that the situation would become extremely serious if the allegations went beyond a simple extramarital affair.

Ackman expressed hope that the matter involved only a personal affair rather than a threat to the national security of the United States.

Tesla CEO Elon Musk expressed agreement with a post published by Shaun Maguire, a partner at Sequoia Capital. Maguire had argued that Huang had made an extremely serious mistake, with potentially negative consequences for the United States, but that his role in maintaining America's leadership position in artificial intelligence was irreplaceable.

Donald Trump defends Jensen Huang

US President Donald Trump said on Sunday that he had not discussed the allegations reported in the media with Jensen Huang, but described him as a respectable person and praised his work at the helm of Nvidia.

The White House leader expressed hope that the situation would be resolved favorably, emphasizing that Huang had accomplished remarkable things while leading the company.

Asked whether he should have taken action after receiving information from American intelligence services, Trump responded negatively, stating that he considered Huang an honorable man and that he might have an explanation for what had happened, which should be heard before any conclusions were drawn.

According to The New York Times, the American president had reportedly been informed about the intelligence services' findings approximately a year earlier but had decided not to take any action based on them.

Nvidia CEO's daughter's visit to South Korea canceled

Madison Huang was scheduled to visit South Korea, where she had planned meetings with representatives of artificial intelligence startup Rebellions and a question-and-answer session organized together with Kakao Mobility.

Rebellions confirmed the cancellation of the events, citing unavoidable internal circumstances at Nvidia.

Nevertheless, the Nvidia AI Day Seoul conference, scheduled to take place over two days and bring together approximately 2,000 participants, will proceed according to the original schedule, according to South Korean media.

The event focuses on areas such as physical artificial intelligence, autonomous AI systems capable of performing complex tasks, and the infrastructure required to develop these technologies.

Nvidia did not immediately respond to requests for comment sent by Reuters.

Investigation could affect Nvidia's investments and product launches

Analysts warn that a prolonged investigation or an extensive internal review could delay important investment decisions and the launch of new Nvidia products, with possible consequences for the entire semiconductor industry.

Ryu Young-ho, a senior analyst at NH Investment & Securities, believes the situation could prompt investors to pay greater attention to Nvidia's competitors, including Advanced Micro Devices (AMD).

In this context, Samsung Electronics could benefit from greater visibility, given the close commercial relationships it maintains with AMD.

However, the analyst emphasizes that Nvidia products are difficult to replace, which would limit the impact of any potential disruptions on the market.

Meanwhile, chip deliveries to China could experience further delays, depending on how the investigation develops and its consequences for commercial and regulatory relations.

At the government level, South Korean authorities are attempting to ease concerns regarding the supply of Nvidia graphics processors.

South Korea's vice minister of science said on Monday that the government does not anticipate disruptions to contracted deliveries of graphics processing units (GPUs), despite the problems currently facing the American company.

The development of the investigation thus remains a source of uncertainty for Nvidia, given that the company's dominant position in the artificial intelligence accelerator market and Jensen Huang's personal influence mean that any potential leadership change is being closely monitored by investors and the international technology industry.