Nvidia retained Wachtell, Lipton, Rosen & Katz on Tuesday to lead the independent investigation into CEO Jensen Huang's affair with a woman alleged to be a Chinese spy, the company said in a statement.

Joon H. Kim, a former acting U.S. attorney for the Southern District of New York, will lead the inquiry, according to The Wall Street Journal. Kim joined Wachtell only last month. A panel of independent directors will supervise the work together with the firm.

The appointment landed as Nvidia stock fell about 6% on Tuesday, extending a 4.2% drop at Monday's close.

What does the board already claim?

Nvidia's board announced the investigation on Sunday. In that announcement, it said nothing gave it cause to think Nvidia's secrets or U.S. national security had been put at risk, CNBC reported. The board also said it would examine claims that Huang had been singled out by a foreign spy operation.

For executives and compliance teams, the structure matters: independent directors, not management, chose the counsel and retain supervision. That design mirrors how boards insulate an inquiry from the CEO it concerns — and Huang is the CEO, co-founder and the company's defining figure.

What did Huang admit?

Huang admitted the affair on Sunday in a note emailed to employees. "My actions hurt her and our children. There is no excuse for what I did," he wrote, according to CNBC.

The woman is Alice Huang, a Megaspeed executive whom American intelligence officials consider an operative working for China. She is not related to Jensen Huang. China's Foreign Ministry spokesperson Guo Jiakun called the allegation unsubstantiated.

How high does the pressure reach?

President Donald Trump said Monday that Huang told him he had no idea the woman was a spy and that the FBI is reviewing the issue. "I really believe him," Trump said.

The FBI review is one of three separate government or legal tracks now touching the company:

• A board-led independent investigation run by Wachtell and supervised by a panel of independent directors, with Joon Kim leading.
• A Justice Department criminal probe of Megaspeed International, a Singapore-based firm suspected of illegally funneling Nvidia AI chips to China.
• A shareholder class action filed by Rosen Law Firm against Nvidia and Jensen Huang in federal court in San Jose, California.

The Rosen suit contends the defendants issued inaccurate or deceptive statements about the affair and about the relationship between Nvidia and Megaspeed. That claim puts disclosure, not the affair itself, at the center of the securities litigation — the question for the court will be what Nvidia said publicly and when.

What does this change for investors and buyers?

The market has already priced a two-day penalty: 4.2% off Monday, roughly 6% more on Tuesday. The board's Sunday statement that no secrets or national security interests were compromised is its current defensive line; Wachtell's findings will either support it or force a revision.

For customers, the exposure runs through the chip pipeline. The Justice Department's probe of Megaspeed targets suspected illegal diversion of Nvidia AI chips to China — a sanctions and export-control question that exists independently of Huang's personal conduct, but now shares the same headline.

Watch three markers ahead: the scope and timeline Wachtell sets, any DOJ action against Megaspeed International, and whether the Rosen complaint survives early motions in San Jose. Each can move the stock more than the affair itself.