- Nvidia shares fell over 6% amid CEO Huang's alleged affair with a Chinese businesswoman
- The controversy risks wiping out more than $470 billion in Nvidia's market value in two days
- House committees seek briefings on Huang's ties to a client accused of diverting AI chips to China
Nvidia shares tumbled more than 6% on Tuesday, putting the chipmaker on course to lose over $470 billion in market capitalisation over two trading sessions, as investor concerns deepened over the controversy surrounding CEO Jensen Huang's alleged affair with a Chinese businesswoman accused of being a spy for Beijing.
At 1:03 p.m. ET on November 10, Nvidia shares were trading at $167.48, down $11.19 or 6.26% on the Nasdaq. The latest decline extends the pressure on the world's most valuable chipmaker, with the controversy surrounding Huang adding to investor concerns.
The allegations involve an alleged relationship between the Nvidia CEO and a Chinese businesswoman accused of having links to Chinese intelligence. The stock's two-session decline could wipe out more than $470 billion in Nvidia's market value, highlighting the scale of the sell-off.
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According to The Information, Huang's alleged relationship with Alice Huang, who has been accused of being a Chinese spy, facilitated the shipment of at least $7.5 billion worth of Nvidia chips through Chinese firms.
The New York Times had earlier reported that the Chinese businesswoman was identified as an alleged spy for China's Ministry of State Security in an intelligence memo circulated within the Trump administration. Beijing has rejected the allegations, calling them a smear.
The controversy has brought renewed attention to Nvidia's dealings with China, a market that once accounted for nearly a quarter of the company's revenue before Washington introduced sweeping restrictions on advanced chip exports in October 2022.
Three House committees have reportedly requested closed-door briefings with Huang over his relationship with Singapore-based Megaspeed, an Nvidia customer accused of diverting restricted AI chips to Chinese companies. Megaspeed has denied wrongdoing, saying inspections found no evidence of export-control violations.
The political implications could be significant. Huang has been among the most influential technology executives advising US President Donald Trump on artificial intelligence policy and has repeatedly argued for allowing Nvidia to sell advanced chips to China.
Trump had cleared the way for Nvidia to ship its H200 chips to China in December, subject to the US government receiving a 25% share of sales. However, Beijing has yet to approve large-scale imports, according to Moor Insights & Strategy CEO Patrick Moorhead.
Speaking to CNBC, Moorhead said the latest developments could encourage Congress to push for tighter oversight of chip export licences and mechanisms to track the location of advanced processors.
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Meanwhile, the broader market remained under pressure after hotter-than-expected October inflation data revived concerns that the Federal Reserve could keep interest rates higher for longer. At 9:47 am ET, the Dow Jones Industrial Average was down 0.49%, the S&P 500 had declined 0.61%, while the Nasdaq Composite was trading 0.74% lower.
Nvidia's latest slide also weighed on the semiconductor sector, with the Philadelphia Semiconductor Index falling 0.9%, after two consecutive sessions of gains.
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