By Priya Raman

Nvidia shares were 5.8% lower at €157.84 (£131.67) on Germany’s Tradegate exchange on Monday morning, ahead of Wall Street’s opening, after the chipmaker announced an independent investigation into reports that chief executive Jensen Huang had been targeted by Chinese intelligence.

Nvidia, described as the world’s most valuable chipmaker, reports quarterly earnings in nine days. The timing leaves little room for error: Friday’s partial recovery, when shares jumped more than 7% in early trading, left them around 22% below their October peak, and Monday’s decline threatens those gains.

What triggered Monday’s sell-off?

Reports over the weekend said Huang had been involved with Alice Huang, a former executive at Singapore-based data centre company Megaspeed International. Huang admitted over the weekend that he had been unfaithful to his wife.

US authorities reportedly identified Alice Huang, who is unrelated to Jensen Huang, as a Chinese intelligence asset. The allegations have not been established as findings against Jensen Huang.

Huang told employees: “I owe my family and all of you an apology. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.”

Nvidia’s board appointed independent directors and outside lawyers to examine the reports. The company said it had no reason to believe national security or confidential company information had been compromised, and reiterated its confidence in Huang, who has become the public face of AI (artificial intelligence) and a central architect of Nvidia’s rise.

China has denied involvement. State-backed newspaper Global Times accused American media outlets of promoting an unfounded espionage narrative, leaving the underlying reports unresolved.

Josh Gilbert, an analyst at eToro, said: “A cloud over Huang is also a cloud over the stock. Any doubt over his position is going to matter to shareholders.” He warned that investors would have to account for further uncertainty until the investigation concluded.

US President Donald Trump backed Huang on Sunday and described him as a fine person. Billionaire investor Bill Ackman said he hoped the controversy proved a simple affair rather than a risk to national security.

Can the wider AI market absorb the shock?

The wider chip market offered a different signal on Monday, with three major Asian technology stocks posting gains:

• TSMC rose 6.5%.
• Samsung Electronics advanced 2.9%.
• SK Hynix gained 4.7%.

That divergence followed a violent week for technology shares. Investors saw $2.5 trillion wiped from the Nasdaq on Thursday amid fears that the AI investment boom could not sustain itself. The Nasdaq fell more than 5.5%, while chipmakers AMD and Micron suffered double-digit losses.

The sell-off came after sweeping Democratic victories in US midterm elections. The political shift intensified concerns that growing opposition to energy-intensive data centres could slow America’s AI infrastructure expansion, weakening confidence in continued spending.

Naeem Aslam, chief investment officer at Zaye Capital Markets, warned that the Huang investigation introduced further uncertainty for semiconductor stocks and the wider AI industry. He also said European technology companies were particularly exposed to renewed selling pressure on Wall Street.

The scandal has renewed scrutiny of Nvidia’s relationship with China, where US export controls—government restrictions on sales of advanced American chips—have sought to limit Chinese access. Huang has previously criticised those restrictions, arguing that they had encouraged Chinese companies to develop rival technology.

For shareholders, the inquiry now binds leadership credibility to scrutiny of China exposure and confidence in AI infrastructure spending. Nvidia must answer those linked questions before quarterly results in nine days.