President Donald Trump said the FBI is "looking into" the affair between Nvidia CEO Jensen Huang and a woman suspected of spying for Chinese intelligence, according to the Associated Press. Trump added that Huang told him he "had absolutely no idea that the person in question was a spy."
The admission follows a turbulent weekend for the world's most valuable chipmaker. Huang publicly admitted to an extramarital affair, Nvidia opened a formal investigation into his relationship with the woman — an executive at Singapore-based chip buyer Megaspeed named Alice Huang — and the company's shares fell 5%, wiping more than $200 billion from its market value.
Who is Alice Huang and what is Megaspeed?
Alice Huang shares Jensen Huang's last name but is not related to him. She is an executive at Megaspeed, a Singapore-based company that buys Nvidia chips. U.S. intelligence officials believe she was recruited by the Chinese government to gather intelligence on Jensen Huang and to influence his stance on U.S. export controls for advanced AI chips, according to TechCrunch.
The connection was not entirely new. New York short seller Culper Research flagged it six months before the scandal broke, in a May 13 report that described the relationship between the two executives as "uncomfortably close." Culper also alleged that Megaspeed was secretly financed by Chinese tech giant Alibaba through shell companies, and that China business lost to export controls had been rerouted through Southeast Asia. The Financial Times reported Monday that documents show Alibaba lent money to Megaspeed through subsidiaries. Culper stood to profit from its allegations, and the chip-diversion claims have not been independently verified.
Nvidia board under scrutiny over succession
The scandal has turned a spotlight on Nvidia's thin corporate governance and opaque succession planning, Semafor reports. Huang's future now rests with a board that lacks the experience and stature usually found at a company of Nvidia's size. The average Nvidia director has served almost 15 years, nearly twice the S&P 500 average, and none are current or former S&P 500 CEOs or have national-security experience.
Nvidia has never publicly signaled a succession plan for Huang, who co-founded the company in 1993 and has more than 50 direct reports. The word "succession" appears nowhere in its most recent annual report, compared with 25 times for Microsoft and 16 for Alphabet. The board has said it still has confidence in Huang.
