Nvidia Stock and AI World Rocked by CEO Jensen Huang’s Affair With Alleged Chinese Spy

Nvidia shares continued to decline on Tuesday as the chipmaker responsible for much of the infrastructure behind the AI era dealt with the fallout over CEO Jensen Huang‘s admitted affair with an alleged Chinese spy.

The share price was trading around $166.70 as of noon on Tuesday, down roughly 6% from market open that day and reaching its lowest share price since March. The continued decline followed the CEO’s admission on Sunday that he had an affair with Alice Huang, a former executive at the Singaporean AI computing company Megaspeed who the New York Times reported was recruited by China’s Ministry of State Security to spy on the executive and learn more about Nvidia’s AI chips.

Huang’s admission prompted Nvidia’s board of directors to launch an independent investigation into its CEO, though it claimed it had “no reason to believe that either national security or Nvidia secrets were compromised.” Huang will continue to lead the company throughout the inquiry, which he “fully supports…and has committed to cooperating with,” the company said. Huang initially denied any wrongdoing related to Alice Huang. The two are not related.

The stakes for Nvidia and the AI world are extensive, particularly as the company faces no apparent succession plan, a federal investigation and a federal securities fraud class-action lawsuit. Huang, who co-founded Nvidia in 1993 as a graphics chip provider for video games, grew it into one of the world’s most valuable companies as it made many of the chips powering the AI boom.

Nvidia did not respond to an immediate request for comment.

The influence extended politically, with Huang becoming one of President Donald Trump’s closest tech allies. Trump defended Huang in a news conference on Monday, saying he believed Huang’s assertions that he was unaware of Alice Huang’s affiliations, though the president confirmed the FBI was also investigating the relationship. The Commerce Department had also investigated Nvidia over whether it helped smuggle chips into China before it was moved to the Justice Department.

Nvidia’s AI grip enveloped the entertainment industry. The company has invested in AI entertainment companies Higgsfield and Runway, with Huang posing with Higgsfield CTO Yerzat Dulat at an event in Kazakhstan last month. Huang was also scheduled to appear at a New York summit for the AI audio startup ElevenLabs, another Nvidia investment, in conversation with ElevenLabs CEO Mati Staniszewski. An ElevenLabs spokesperson said Huang would no longer appear at the event, though a company representative did not respond to an immediate request for comment on how the saga would impact its relationship.

A Higgsfield spokesperson said the company had no plans to return the investment, and CEO Alex Mashrabov called Huang “irreplaceable for America’s AI leadership” in an X post on Monday.

“The board’s investigation must establish the facts. And as it does, we should remember what Jensen has built,” Mashrabov wrote. “As he put it, America should have ‘the first, the most, and the best.’ Few people have done more to make that true.”

A Runway spokesperson did not respond to an immediate request for comment.

Disney also announced a partnership with Nvidia and Google DeepMind last year to develop Newton, an open-source physics engine that lets robots learn how to handle complex tasks with greater precision. The robotics project, incorporating physical AI, included real-world robots of Star Wars characters like BDX droids and the “Frozen” snowman Olaf. A Disney spokesperson did not immediately respond to questions about how the investigation would impact the companies’ relationship.

Nvidia’s entertainment entanglements also extend to the music industry. The company struck a deal with Universal Music Group in January to marry its AI technology with UMG’s catalog to develop “responsible AI for music discovery, creation, and engagement. The deal included enhancing Nvidia’s Music Flamingo AI audio model with UMG work and creating an artist incubator, an arrangement UMG CEO Lucian Grainge called “a shared mission to harness revolutionary AI technology to dramatically advance the interests of the creative community and the role of music in global culture.”

A UMG spokesperson did not immediately respond to similar questions over the saga’s impact on the companies’ relationship.