Nvidia is facing mounting scrutiny over chief executive Jensen Huang’s alleged relationship with a Chinese businesswoman suspected of links to Beijing’s intelligence network, amid claims that she helped facilitate at least $7.5bn in chip shipments to Chinese companies.
The controversy has raised concerns about the technology giant’s corporate governance, possible national security implications and the risks associated with its reliance on Huang, who has led the company for more than three decades.
Nvidia lost approximately $430bn in market value over two trading sessions as reports about the alleged relationship and its connections to restricted chip exports intensified.
The latest developments emerged on Tuesday, when reports said Alice Huang had helped arrange shipments of Nvidia processors to Chinese firms, including major technology companies and smaller artificial intelligence laboratories.
The company’s independent directors have appointed external legal counsel to investigate the matter, while political pressure has mounted in Washington over Nvidia’s business dealings with China.
Republican Senator Kevin Cramer, a member of the Senate Banking Committee, called on Jensen Huang to resign, arguing that the alleged relationship could expose the company to the risk of blackmail.
Senate Democratic Leader Chuck Schumer also demanded explanations from the Trump administration and urged Congress to strengthen restrictions on American semiconductor exports to China.
The allegations have placed Huang’s personal conduct at the centre of a wider debate about the security of advanced technology exports and the effectiveness of controls designed to prevent sensitive American chips from reaching China.
Huang, 63, has acknowledged to Nvidia employees that he was unfaithful to his wife, although he did not disclose details of the relationship. The FBI is separately examining whether he may have been targeted as part of a foreign intelligence operation.
China’s Foreign Ministry has rejected the allegations that Alice Huang was a spy, describing them as baseless.
Nvidia said its board had no reason to believe that American national security interests or company secrets had been compromised. The company added that Huang had agreed to cooperate fully with the internal investigation.
The board has retained Joon Kim, a partner at law firm Wachtell Lipton and former acting US Attorney for the Southern District of New York, to lead the inquiry. Kim specializes in internal investigations and white-collar defence.
Huang reportedly apologized to senior executives during a closed-door meeting on Monday before turning to business matters. CNBC reported that he returned to meetings at Nvidia’s headquarters on Tuesday.
Questions over Trump’s knowledge of the allegations
The controversy has also drawn attention to what US President Donald Trump knew about the intelligence concerns surrounding Huang and when he was informed.
The New York Times reported on Tuesday that Secretary of State Marco Rubio briefed Trump aboard Air Force One in May, while the president was travelling to China, about US intelligence suggesting that Huang was involved with a woman suspected of being a Chinese spy.
The newspaper, citing people familiar with the matter, said the briefing was at least the second time in seven months that Trump had received information about the intelligence.
Trump said on Monday that he had spoken to Huang and asked whether he knew the woman was a spy. According to the president, Huang said he had no knowledge of any such links, and Trump said he believed the Nvidia chief.
Trump also said he had not known about the alleged relationship when Huang accompanied him on his May visit to China.
A White House official disputed the newspaper’s report and referred Reuters to the president’s earlier comments.
Schumer said Congress needed a full explanation of the administration’s handling of the matter. He accused Trump of failing to adequately address the risk of foreign espionage in the US technology industry and called for faster action on restrictions governing chip exports to China.
Separately, Axios reported that Commerce Secretary Howard Lutnick had received a highly classified memorandum warning about Huang’s relationship with Alice Huang. Reuters said it could not independently verify the report.
The Commerce Department and Nvidia did not immediately respond to requests for comment.
Businesswoman linked to network supplying Nvidia chips to China
Alice Huang, also known as Huang Le, reportedly built a network of companies across China and Singapore with her husband and sister to obtain Nvidia processors for Chinese customers, according to The Information.
The publication reported that she helped facilitate the movement of about 240,000 Nvidia H100, H200 and some A100 chips into China.
When orders for processors subject to US export restrictions encountered difficulties, she allegedly used her connections to Nvidia to secure supplies. Some of the chips were reportedly destined for Alibaba, Tencent and smaller Chinese AI developers.
Alice Huang previously held senior positions at an investment firm in Shanghai before becoming the controlling shareholder of Singapore-based cloud computing company Megaspeed International.
Megaspeed was linked to China-based Century Litong, which received preferred cloud partner status from Nvidia in 2023. The arrangement gave the company priority access to Nvidia’s chips.
Reuters said it could not establish Alice Huang’s whereabouts to seek her response to the allegations.
The Financial Times also reported on Tuesday that several US government agencies had pushed for Megaspeed to be added to the Commerce Department’s entity list, a trade blacklist used against organizations considered security risks or linked to China.
However, the newspaper said the department was delaying efforts to add the company to the list while seeking further information about some businesses under consideration. It was unclear whether Megaspeed was among the companies affected by the delay.
The Commerce Department and Nvidia did not respond to Reuters requests for comment. Alibaba, Tencent, Megaspeed and Century Litong were also unavailable for immediate comment.
Nvidia’s market position faces fresh uncertainty
The allegations have added to investor concerns about Nvidia, whose shares have also faced pressure over questions about whether massive spending on artificial intelligence will generate sufficient returns.
The stock had been broadly flat for the year before reports about Huang’s alleged relationship emerged. It has since fallen 9.5 per cent, underperforming the wider US market.
Huang owns approximately 3.6 per cent of Nvidia but does not have majority voting control. He has built the company into the dominant supplier of processors used in artificial intelligence systems.
His leadership structure is also unusual, with dozens of senior executives reporting directly to him, making his position central to the company’s operations and strategic direction.
The investigation now places Nvidia’s board under pressure to establish whether the alleged relationship created risks for the company or compromised compliance with US export restrictions.
While Nvidia maintains that it has found no evidence of compromised secrets or national security, the allegations have raised questions about its internal controls, its access to sensitive markets and the potential consequences of its close dependence on its chief executive.
