Nvidia is facing mounting pressure after fresh reports tied a personal relationship of chief executive Jensen Huang to the flow of the company's advanced AI chips into China. The chipmaker lost roughly $430 billion in market value across two trading sessions as the story spread.
The controversy now spans the company's boardroom, the White House and Congress. According to a report by Reuters, Nvidia's independent directors have brought in outside counsel, while Senate Democratic Leader Chuck Schumer is pressing for answers and for stricter limits on chip exports to China.
Allegations Link Affair to Billions in Chip Shipments
At the center of the reports is Alice Huang, also known as Huang Le, a Chinese businesswoman alleged to be working for Beijing's intelligence services. New allegations claim her relationship with the Nvidia CEO helped facilitate at least $7.5 billion worth of Nvidia chip shipments to China.
The Information reported that she, along with her husband and sister, assembled a web of companies across China and Singapore to obtain Nvidia hardware. When orders for export-restricted chips stalled, she allegedly leveraged her Nvidia connections to secure supply, helping move about 240,000 H100, H200 and some A100 chips into China.
Some of those chips reportedly ended up serving Alibaba, Tencent and smaller Chinese AI labs. Reuters said it could not locate Alice Huang to request comment and could not independently verify the reports.
A Corporate Network Built Around Cloud Computing
Before her involvement in the chip trade, Alice Huang held senior positions at a Shanghai investment firm. She later became the controlling shareholder of Megaspeed International, a cloud-computing company based in Singapore.
Megaspeed was connected to Century Litong, a China-based firm that in 2023 gained preferred cloud partner status with Nvidia, a designation that gave it priority access to the company's chips.
The Financial Times reported that several US agencies had pushed to add Megaspeed to the entity list, the trade blacklist for China-linked groups deemed national security risks. The Commerce Department, however, was reportedly slowing those efforts after requesting more information on some companies, leaving Megaspeed off the list for now.
Nvidia's Board Opens an Internal Review
Nvidia's independent directors have hired Joon Kim, a partner at Wachtell Lipton and former acting US Attorney for the Southern District of New York, to lead an investigation. His practice covers internal investigations and white-collar defense.
The company has said its board has no reason to believe that US national security or Nvidia's own secrets were compromised, and that Huang has pledged to cooperate with the review. Separately, the FBI is examining whether the 63-year-old executive was the target of a foreign intelligence operation.
Huang has acknowledged to employees that he was unfaithful to his wife, without describing the relationship. CNBC reported that he apologized to senior executives in a closed-door meeting on Monday and was back holding meetings at headquarters the following day.
Washington Takes Notice
The New York Times reported that Secretary of State Marco Rubio briefed President Donald Trump aboard Air Force One, on the way to China, about intelligence suggesting Huang was involved with a suspected Chinese spy. The paper said it was at least the second time in seven months that Trump had been informed.
Trump said on Monday that he had asked Huang directly whether he knew the woman was a spy, that Huang denied any knowledge, and that he believed him. Trump added that he was unaware of the alleged ties when Huang joined him on a trip to China in May. A White House official disputed the Times report.
Schumer called for a full accounting of the president's defense of Huang and urged quick passage of new chip export restrictions. "He's supposed to protect America, not China, not his friends," Schumer said.
Governance Questions Weigh on the Stock
The episode has turned a personal matter into a corporate risk. Huang has led Nvidia for more than three decades and built it into the dominant AI chip supplier, owning about 3.6% of the company without majority voting control.
He also runs an unusually flat organization, with dozens of executives reporting directly to him, which sharpens investor concern about how dependent the company is on one person. Nvidia's shares, nearly flat for the year before the news, have fallen 9.5% since it broke, amid wider unease over returns on heavy AI spending.
What the Fallout Could Mean for the Chip Sector
For the semiconductor industry, the reports could add momentum to calls for tighter export enforcement and closer scrutiny of cloud partners and intermediaries that handle restricted hardware.
For founders and boards more broadly, the situation is a reminder that concentrated leadership can become a vulnerability. How Nvidia's internal review and the federal inquiries conclude will likely shape both investor confidence and the next round of US chip policy toward China.
Source: Euronext Markets: Real-time Stock Market Data | live
