Markets are punishing Nvidia for its CEO’s alleged ‘honeytrap’ scandal
The company’s board said in a statement it was opening the inquiry “in light of recent reporting that founder and CEO Jensen Huang has been the target of a foreign intelligence effort.” A committee of independent directors working with outside legal counsel will oversee the review. The board said it has “no reason to believe that either national security or NVIDIA secrets were compromised,” and that Huang has agreed to co-operate fully and will remain in his role.
CEO admits affair and backs investigation
In the internal memo, Huang said: “I take full responsibility for what I did and the hurt I caused, and I accept the criticism that comes with it.”
Dan Ives, partner and senior managing director at Yorkville Ives & Co. in New York, described the development as a “black eye moment for Jensen” and said the board’s investigation would create an overhang on Nvidia’s share price as investors weigh whether Huang will remain at the helm of the company he co-founded. CNBC sources indicated Huang could take a leave of absence if the investigation interferes with his ability to lead.
China’s Foreign Ministry spokesperson Guo Jiakun dismissed the allegations on Monday, saying the “so-called Chinese spy narrative is completely unsubstantiated.”
Megaspeed probe and chip export concerns
Megaspeed International, described in prior reports as the largest buyer of Nvidia chips in Southeast Asia, has been under investigation by U.S. authorities since 2024 over its alleged role in routing Nvidia’s advanced hardware into China in circumvention of U.S. export controls. Singapore’s Ministry of Home Affairs has stated it has not conducted investigations into Alice Huang’s alleged connections to Chinese intelligence or her relationship with Jensen Huang.
