Not even Trump could save Jensen Huang as Nvidia stock nosedives

Nvidia shares took a major nosedive yesterday.

One of the biggest AI companies in the world saw its stock drop more than 4% on Monday after the company confirmed its board had opened an internal investigation into CEO Jensen Huang.

The inquiry centers on his ties to Alice Huang, a cloud executive whom American intelligence agencies accuse of passing information to Beijing, according to The New York Times and the Financial Times.

A trillion-dollar scandal

In an official statement, Nvidia said Huang “fully supports the review and has committed to cooperating with it.” However, an internal investigation has been ordered after the reports that Huang had been a victim of a “foreign intelligence effort.”

In short, Huang was allegedly honeypotted by a Chinese woman whom he had entered into an affair with. She has been accused of targeting Huang and relaying relevant information back to the Chinese government.

In a candid note sent to employees, Huang owned up to the personal scandal. “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, acknowledging that he had “fallen short” of his leadership responsibilities.

Meanwhile, officials in China brushed off the accusations. Chinese Foreign Ministry spokesperson Guo Jiakun told Reuters on Monday that the “so-called Chinese spy narrative” was completely unsubstantiated.

Defense from powerful men

The investigation sparked instant questions about Huang’s future at the helm. But according to Dan Ives, a senior managing director at Yorkville Ives & Co., that is pure “comedy.”

Even so, while other tech stocks surged across the sector, Nvidia slipped as traders weighed the uncertainty.

Panmure Liberum strategist Joachim Klement noted that if Huang’s standing is “endangered,” the fallout could disrupt Nvidia’s relationships with technology partners across the globe.

Despite the turbulence, prominent figures rushed to defend the billionaire chief executive.

Donald Trump told reporters on Sunday that “he’s done an amazing job for our country,” calling him an honorable person. Trump doubled down on that sentiment during a bizarre press conference where he brushed off an FBI probe into the Nvidia scandal and told reporters that he “really believe” the tech giant.

Silicon Valley leaders also rallied around Huang, with Sequoia partner Shaun Maguire calling him “one of the greatest entrepreneurs of this generation” and arguing that “Jensen is irreplaceable for America’s AI leadership.” Elon Musk promptly amplified the post.

This article is made and published by Daniel Wolfram, who may have used AI in the preparation