Allegations Against CEO Trigger Massive Losses for NVIDIA

NVIDIA, the leading US-based artificial intelligence chipmaker, is facing mounting scrutiny following allegations involving its CEO, Jensen Huang, and Alice Huang, a businesswoman suspected of having links to Chinese intelligence. Reports about their alleged personal relationship have triggered investor concerns and sent NVIDIA shares sharply lower. The company is on track to lose more than $470 billion in market value over two trading sessions, following significant declines on Monday and Tuesday. The controversy has also intensified scrutiny of Singapore-based Megaspeed and its reported role in supplying NVIDIA chips to Chinese companies. Meanwhile, shareholders have filed a proposed class-action lawsuit against NVIDIA and Jensen Huang in a US federal court, alleging that investors were not adequately informed about potential risks associated with the matter.

The controversy has raised questions about corporate governance, national security, export-control compliance and NVIDIA's future leadership. The lawsuit alleges that the undisclosed relationship and its potential implications could have exposed the company to reputational and business risks. NVIDIA's board has initiated an independent investigation into the matter, while further scrutiny from US authorities could influence the company's business prospects. However, gains in rival semiconductor stocks such as Broadcom and AMD indicate that investors are not necessarily treating the issue as a sector-wide crisis. Market participants will closely monitor the company's response and upcoming financial results, scheduled for November 17.