Nvidia opens an inquiry over Jensen Huang

Jensen Huang, the founder and chief executive of Nvidia, admitted on Sunday 8 November in an email to employees that he had an extramarital relationship with Alice Huang, an executive at Megaspeed. Megaspeed is a cloud company based in Singapore and an Nvidia customer. According to The New York Times, US intelligence agencies believe that Alice Huang was recruited by China's Ministry of State Security. The Nvidia board opened an independent investigation and says it has no reason to believe that company secrets or national security information were compromised. Huang remains chief executive.

What happened between 29 October and today

The story became public on 29 October, when The New York Times reported that the Trump administration had received an intelligence memo about Alice Huang in the spring. Nvidia replied the same day that Megaspeed is one of its regional cloud customers and that Huang's contacts with its executives are not unusual.

Megaspeed was already known to the authorities. In October 2025 the Singapore police and the US Commerce Department were investigating whether it helped Chinese companies get around American restrictions on chip exports. According to The New York Times, it had bought advanced Nvidia products worth almost $2 billion through a subsidiary in Malaysia. Nvidia says the allegations that chips were diverted to China were thoroughly investigated last year and found to be groundless.

On 4 November the Republican chairs of three House committees, on foreign affairs, on China and on intelligence, asked Huang to brief them behind closed doors on 18 November. On Saturday the Democratic senator Chris Coons wrote that Congress will investigate the case. On Sunday came Huang's admission and the board investigation, which will examine whether Huang was the target of a foreign intelligence effort.

How Nvidia shares reacted

On the day of the report, 29 October, the shares lost only 0.8% and closed at $213.66. The large fall came a week later, on Thursday 5 November, when Nvidia lost 9.3% and closed at $181.60. That fall had nothing to do with the case. After the American elections the whole chip sector fell on fears that the construction of data centres will slow down, as the Insight on Black Thursday explains.

On Friday 6 November the shares closed at $186.64, 22% below the record of $239.24 set on 6 October. Monday 9 November is the first trading day after Huang's admission.

How much China weighs in Nvidia's sales

China is now a small part of Nvidia's sales. In the quarter to 26 July, customers headquartered in China and Hong Kong brought in $7.88 billion, or 8.2% of total revenue of $96.2 billion. Nvidia itself notes that the end customer may be in a different country from the buyer's headquarters. This applies to companies such as Megaspeed, which run data centres in Southeast Asia.

The American government allowed limited sales of the H200 chip to Chinese customers, but Beijing restricted them. These sales were below 1% of Nvidia's data centre revenue. For the third quarter Nvidia expects revenue of $108 billion, plus or minus 2%. This outlook assumes no revenue at all from data centre chips in China.

The next dates for Nvidia

Nvidia's results and the briefing requested by Congress fall on two consecutive days.

1. Results, Tuesday 17 November. Nvidia reports results for the quarter that ended on 25 October after Wall Street closes, around 1:20 p.m. Pacific time. They will show whether it reached the $108 billion of its outlook and what it expects for the next quarter.
2. Congress, Wednesday 18 November. This is the day the three committee chairs requested for the briefing. Nvidia has not said publicly whether Huang will attend.
3. The board investigation. There is no announced date for its conclusion and no word on whether its findings will be published.
4. New Congress, January. The Democrats won both chambers in the elections of 3 November. According to CNBC, Coons is in line to chair the Senate Foreign Relations Committee.

What risks the case brings for Nvidia

What has been published so far points to three risks for Nvidia.

1. Leadership. Huang co-founded Nvidia in 1993 and has run it ever since. When a company is so closely identified with one person, any doubt about that person passes to the company itself. Analysts call this key person risk.
2. Licences from Washington. Every H200 sale to China needs a licence from the American government, an inspection of the chips in the United States before shipment and a 25% tariff, which Nvidia has not been able to pass on to its customers. What Nvidia sells and to whom depends on decisions by the government.
3. New rules for the cloud. Current law does not give regulators broad authority to control who rents Nvidia chips through cloud services outside the United States, according to CNBC. The Remote Access Security Act, which closes this gap, passed the House in January and is waiting for the Senate. A spying case around Huang himself gives arguments to those who want stricter rules.

What it means for chip stocks and ETFs

Three links connect the Nvidia case with the rest of the sector:

1. The same rules. American export restrictions apply to all advanced artificial intelligence chips. Stricter rules for China or for the cloud would also reach AMD, which makes competing chips.
2. The supply chain. Nvidia designs its chips but does not manufacture them. TSMC makes them in Taiwan, while the memory that goes with them comes from companies such as Micron. Every change in Nvidia's sales becomes a change in their orders.
3. Shared moves on the stock market. Investors see chip stocks as one shared bet on artificial intelligence and buy or sell them together. On 5 November, when Nvidia lost 9.3%, Micron lost 17.5%, AMD 17.3%, TSMC 10.8% in New York and Broadcom 10.4%.

Anyone with an S&P 500 ETF, such as VUAA, holds about 6.9% in Nvidia shares. That was its weight in the holdings of SPY, the largest ETF on the index, on 5 November. In the MSCI World its weight was 5.25% on 30 October and in the FTSE All-World, the index of VWCE, 4.59%. Together with Broadcom, Micron and AMD, the four largest American chip companies weigh 11.3% in the S&P 500.

With these weights, a 10% fall in Nvidia takes about 0.7% off an S&P 500 ETF and about 0.5% off a global ETF, if the other shares stay flat. Anyone with a thematic ETF on chips has much larger exposure, because there the companies of the sector are the whole portfolio.

What to take away

• Huang admitted the relationship with a Megaspeed executive and the board is investigating whether he was a target of Chinese intelligence. The shares lost only 0.8% on 29 October, the day of The New York Times report, while the 9.3% fall of 5 November came from fears about artificial intelligence spending.
• China brought in 8.2% of Nvidia's revenue in the latest quarter, so the risk lies mainly in the rules and the licences. The next dates are the results on 17 November, Congress on 18 November and the new Congress in January.
• Chip stocks move together, so the case also reaches AMD, TSMC and Micron. An S&P 500 ETF holds about 6.9% in Nvidia and a global ETF between 4.6% and 5.3%.