Nvidia shares fell more than 4% on Monday, even as the broader market rallied sharply. The drop followed CEO Jensen Huang's message to staff on Sunday acknowledging an affair with a purported Chinese spy. Huang said the board was launching an investigation into whether he was targeted by a foreign intelligence agency.
The board said it has "confidence in Jensen" and "no reason to believe that either national security or Nvidia secrets were compromised." Nvidia said Huang will continue to lead the company during the probe.
The New York Times first reported that the Chinese businesswoman was a spy for China's Ministry of State Security, according to people briefed on an intelligence memo circulated among the Trump administration in the spring. China has called the allegation a smear.
Leaders from both parties are calling for briefings. Sen. Elizabeth Warren of Massachusetts wrote in a post on X on Monday that Democrats poised to take control of both houses of Congress are calling for investigations and new legislation "to stop advanced AI chips from fueling China's military."
Analysts said Huang is the company's sole face, with no clear second-in-command. Melius Research wrote in a Monday note that "there is no clear successor to Jensen." Stacy Rasgon of Bernstein told CNBC that "Jensen is Nvidia. Nvidia is Jensen."
Timm Schulze-Melander of Rothschild & Co. Redburn wrote that Huang could be forced to step back if the investigation reveals "something materially more serious" than an undisclosed relationship. He said a resignation is not a foregone conclusion. Several analysts said the investigation could lead to governance changes, including a transition contingency plan.
Nvidia did not immediately respond to a request for comment.