Nvidia shares fell about 4% in premarket trading Monday after the company's board launched an independent investigation into CEO Jensen Huang's relationship with a businesswoman that U.S. intelligence agencies say is a Chinese spy, according to CNBC.
Citing reports in The New York Times and The Financial Times, CNBC said U.S. intelligence agencies assert that Alice Huang, an executive at cloud company Megaspeed, has been passing information to Beijing. Nvidia said its board is reviewing reports that Huang was the target of a "foreign intelligence effort." The company said Jensen Huang "fully supports the review and has committed to cooperating with it."
In an email to staff, Jensen Huang said he had "fallen short" of his responsibilities and apologized for an extramarital affair.
China's Foreign Ministry spokesperson Guo Jiakun said Monday that the "so-called Chinese spy narrative" is unsubstantiated, Reuters reported.
Dan Ives, senior managing director at Yorkville Ives & Co., said whether Huang remains CEO will be the key question for investors. He said there is "clearly risk" Huang could be removed depending on the board's findings.
U.S. President Donald Trump praised Huang on Sunday but said he had not spoken with him about the investigation.
Nvidia reports third-quarter earnings on Nov. 17.