Nvidia shares fall about 9.5% in two days amid Huang spy scandal

What happened

• Nvidia shares closed down 5.5% at $168.89 on Tuesday after falling 4.3% on Monday, leaving the stock about 9.5% below Friday's close and erasing roughly $430 billion in market value, per Yahoo Finance data cited by Decrypt.
• Nvidia's board of directors launched an investigation on Sunday after Huang said he had been "unfaithful" to his wife and appeared to confirm his affair with Alice Huang, an executive at Singapore-based data center company Megaspeed suspected of passing information to Beijing, The Hill reported.
• The independent members of Nvidia's board retained Joon Kim, a former acting U.S. attorney for the Southern District of New York, and his firm Wachtell, Lipton, Rosen & Katz to conduct the investigation, the company said Tuesday.
• Sen. Kevin Cramer, a North Dakota Republican on the Senate Banking Committee, called on Huang to step down, telling Politico the potential for extortion was too great and that the board's internal investigation was "fine, but not nearly enough."
• House Foreign Affairs Committee Chairman Brian Mast told ABC News he was prepared to subpoena Huang unless he responded by Wednesday to a request for a closed-door briefing on November 18, the day after Nvidia reports quarterly earnings.
• Alice Huang, also known as Huang Le and not related to Jensen Huang, became controlling shareholder of Singapore-based Megaspeed in March 2023 after working in banking and investment management in China, according to a Reuters review of corporate records; Megaspeed is listed by Nvidia as a cloud partner and has drawn U.S. scrutiny over whether it helped Chinese firms obtain export-controlled chips, with no public finding that it broke rules.
• The Wall Street Journal reported that Nvidia's board was preparing to dismiss Huang and would meet as soon as the day of publication to decide his future, following a New York Times report of a second alleged affair, with Nvidia not immediately responding to The Verge's request for comment.
• Investors and tech figures including Shaun Maguire of Sequoia Capital, Elon Musk, Bill Ackman, Gavin Baker, Jason Calacanis and Antonio Gracias publicly defended Huang, arguing his departure would harm U.S. AI leadership, according to threednews.ru.

Why it matters

The reported intelligence concerns around Huang's relationship have triggered a sharp share decline, board investigation and congressional pressure that could affect Nvidia's leadership and its lobbying on chip export policy.

What is unknown

The reported board plan to dismiss Huang comes from the Wall Street Journal and has not been confirmed by Nvidia. The second alleged affair and the intelligence conclusions about Alice Huang are attributed to media reports and unnamed officials; Beijing has denied spying allegations, Alice Huang has not commented, and no public finding establishes that Megaspeed broke export rules. The outcome of the board investigation and any leadership decision remain unconfirmed.