Jensen Huang Loses $16 Billion as Nvidia Sheds $400 Billion in Two Days, Ex-Prosecutor Joon Kim Leads Probe

SANTA CLARA, Calif. — Nvidia has lost roughly $400 billion in market value in two trading days. Its chief executive, Jensen Huang, has dropped out of the ranks of the world's 10 richest people, and the company's board has brought in a former top federal prosecutor to investigate his relationship with a woman U.S. intelligence agencies have linked to Chinese spying.

Nvidia's independent directors said Tuesday they had hired Joon H. Kim, a former acting U.S. attorney for the Southern District of New York, and his firm, Wachtell, Lipton, Rosen & Katz. The board said they would "conduct a thorough and independent investigation." The inquiry was first announced Sunday, after Huang admitted to an extramarital affair.

Kim joined Wachtell last month. He is best known for co-leading the New York attorney general's investigation into sexual harassment allegations against then-Gov. Andrew Cuomo, which ended with Cuomo's resignation in August 2021. As a federal prosecutor, Kim also oversaw cases against organized crime figures and public officials.

The board will examine whether Huang was the target of what it called a "foreign intelligence effort," and whether company secrets or national security were compromised. On Sunday, the board said it had "no reason to believe that either national security or NVIDIA secrets were compromised," but it gave no timeline for the probe.

Shares and fortune tumble

Nvidia shares fell 5.5% on Tuesday to close at $168.80, after a 4.27% drop on Monday. The two-day slide cut the company's market capitalization to about $4.07 trillion, down from about $4.5 trillion before the scandal broke and well below its peak of $5.7 trillion on Oct. 2.

During trading on Tuesday, Nvidia briefly fell behind Microsoft to become the world's third-most valuable company.

The selloff stood out because the rest of the tech sector rose. Apple, Microsoft, Alphabet, Amazon, Meta and Tesla all gained on Tuesday, as did chipmakers Broadcom, AMD and Intel.

Huang's personal fortune fell by about $16 billion over the two days to an estimated $146.8 billion, according to Forbes' Real-Time Billionaires list. He slid from eighth to 12th, behind Spanish businessman Amancio Ortega and Walmart's Rob Walton and family. He also ranks 12th on the Bloomberg Billionaires Index. Huang owns about 3.4% of Nvidia, according to FactSet.

The affair and the alleged spy

In an email to employees on Sunday, Huang admitted being "unfaithful" to his wife and said he had "fallen short" of his responsibilities as CEO.

"I owe my family and all of you an apology," Huang wrote. "I am fully committed to NVIDIA and will work to earn back your confidence."

Nvidia has said Huang will remain in charge. "Jensen is committed to continuing to lead NVIDIA as CEO without interruption," the company said. Korean broadcaster YTN reported that Huang has continued to come to work and has held a series of meetings on the company's response.

The woman at the center of the case, Alice Huang, is not related to the CEO. She was an executive at Megaspeed, a Singapore-based cloud computing company that buys Nvidia chips. U.S. intelligence agencies have said she passed information to Beijing, according to The New York Times and the Financial Times. Before moving into AI and data centers, she worked in finance, including at HSBC's Hong Kong private banking arm and Chinese investment bank CITIC Securities.

The technology publication The Information reported, citing sources, that Alice Huang enabled at least $7.5 billion in Nvidia chip exports to China. It said she built a network of companies across Singapore and China that helped move roughly 240,000 Nvidia chips into the country.

U.S. authorities began investigating Megaspeed late last year over suspicions that it was helping divert Nvidia chips to China. Business filings show the company's assets rose to $3 billion in 2024 from $33 million in 2023. Megaspeed has previously said there was "no evidence of any violations concerning the illicit transfer of chips or any illegal activities."

China has rejected the spying allegations as "entirely groundless," saying they are "intended to smear and malign China."

Taiwan confirms Hong Kong passport

In Taiwan, where Jensen Huang was born and is widely celebrated, officials confirmed Wednesday that Alice Huang entered the island on a Hong Kong passport. Holders of Hong Kong passports can travel to Taiwan more easily than people with mainland Chinese passports.

"We were aware of all her relevant entry and exit records," said Lin Horng-en, director-general of Taiwan's National Immigration Agency. Officials said her entry permit has been revoked and that Taiwan's national security agencies are investigating. They declined to say how many times she had visited.

The New York Times has reported that the two met over the past three years in places including Shanghai, Nvidia's Silicon Valley headquarters and Taiwan, where Taiwanese authorities monitored her during visits.

What investigators will examine

Speaking on YTN, Kim Kwang-seok, an adjunct professor at Hanyang University, said investigators are likely to focus on three areas: whether sensitive information was passed to China, whether Chinese companies gained access to restricted computing power through data centers in Southeast Asia, and whether chips were physically moved into China. He stressed that these remain allegations and that no evidence has yet been made public.

Analysts say the uncertainty is likely to weigh on Nvidia's stock until the probe ends. Dan Ives of Yorkville Ives estimated the investigation could take four to six weeks. He said investor chatter put the chance of Huang's removal at roughly 15%.

Critical week ahead

Nvidia is scheduled to report third-quarter results on Nov. 17. Investors will watch closely for any comment on Huang's status and on the company's China exposure. The next day, Huang has been invited to a closed-door briefing with the chairs of three U.S. House committees, on the same day the Asia-Pacific Economic Cooperation leaders' meeting opens in Shenzhen, China.

The company has no publicly named successor to Huang, who co-founded Nvidia in 1993 and built it into the dominant supplier of chips powering the global artificial intelligence boom. Nvidia also has no board chair; a lead independent director oversees the board.