Nvidia Shares Fall Over 8% in Early Trading as Trump and Musk Back Huang During Board Probe

Since Nvidia's board announced an independent investigation of CEO Jensen Huang on Sunday, Nov. 8, the fallout has moved from the boardroom to the market and the White House. Nvidia shares fell more than 8% in opening trade Monday, Nov. 9, after dropping about 5% in premarket.

Huang is under review over reports that he was the target of a foreign intelligence effort. U.S. intelligence agencies believe Alice Huang, no relation to him and a former executive at Singapore-based Megaspeed, was an asset of China's Ministry of State Security, according to the New York Times. Huang admitted Sunday in a message to employees that he was unfaithful to his wife. "There is no excuse for what I did. I am deeply sorry," he wrote.

The market reaction

Bernstein kept its "outperform" rating and $400 price target on Monday. It said the controversy is unlikely to dent demand for Nvidia's products. It also warned the allegations could become a "heavy distraction" or, in a worst case, give "significant ammunition" to lawmakers from both parties.

Nadia El Bilassy, senior market analyst at Equiti Group, told Reuters the news was "just the cherry on top for investors looking to pull out of AI-linked stocks."

The board said a committee of independent directors, assisted by outside counsel, will run the investigation. It said it has no reason to believe company secrets or national security were compromised. Nvidia spokesperson John Rizzo told CBS News, "We trust that if we were the target of a genuine threat, the U.S. government would have notified us."

Per people familiar with the surveillance cited by the Times, Huang never received the kind of defensive briefing the government sometimes gives Americans who may be targeted. The Times also reported that officials did not believe he knew Alice Huang was allegedly gathering information for Beijing.

Trump and Silicon Valley rally

President Trump said Sunday he had not spoken to Huang about it. "I just know he's a fine person, but you never know what is going on," he told reporters. He later said, "I think he's an honorable guy. I think he probably has an excuse for it," and that Huang should stay on as CEO.

The Times reported that Trump was briefed on the relationship about a year ago and took no action. Trump's remarks Sunday did not address that.

Elon Musk posted "I agree" under venture capitalist Shaun Maguire's defense of Huang. Maguire wrote that Huang "did something incredibly dumb" but is "one of the greatest entrepreneurs of this generation." "Two mistakes don't make a right, and I believe Jensen is irreplaceable for America's AI leadership," Maguire added.

The defenders frame it as a personal failing, not treachery. Nothing in the reporting so far shows Huang knew of any espionage. George Chen, a partner at The Asia Group, said the key questions are whether Huang knew of any espionage and whether sensitive information was compromised. "Those questions require evidence rather than speculation," he said.

China's Foreign Ministry spokesperson Guo Jiakun called the spy claim "unsubstantiated" and "nothing but smears against China."

What Megaspeed's record shows

The business side of this story runs separately from the affair, and it is where the documents are.

Bloomberg reported that Megaspeed was the largest buyer of Nvidia chips in southeast Asia, a region U.S. officials have long suspected of serving as a route around export controls on China. Last year, U.S. officials asked Nvidia to audit its dealings with Megaspeed. Nvidia initially replied that its sales were accurately recorded, Bloomberg reported. Megaspeed had imported 50,000 more chips than Nvidia linked to its data centers.

Bloomberg also reported that Nvidia pledged in December 2025 to revisit Megaspeed's data centers as part of an internal review. Records show Megaspeed imported goods worth more than 1,000 times its cash on hand in 2023, the same year it joined Nvidia's partnership program.

The Financial Times reported that Alice Huang and business partner Kang Wei pitched investors in early 2025 on a data-center project worth several hundred million dollars. According to one investor, they said they had "no problem securing GPUs" and named Alibaba as a customer. She did not mention a personal relationship with Jensen Huang, two people who received the pitch told the paper.

Alibaba was the founding anchor customer of Megaspeed's Southeast Asian cloud operation and remains its largest client, two people familiar with the business told the FT. Corporate documents show Alibaba's Singapore subsidiary, Apex Enterprise Solutions, lent money in June 2024 to Megaspeed's Malaysian subsidiary, Speedmatrix, which pledged its entire business as collateral. Megaspeed's balance sheet grew from $33 million to $3 billion during 2024, largely through transactions involving subsidiaries, the FT reported.

Megaspeed has denied any illegal chip activity. It reported that a memo drawn from intelligence information this year alleged Huang had been romantically involved with Alice Huang and that she had been recruited by China's Ministry of State Security. The NY Post, citing reports, said Secretary of State Marco Rubio oversaw the drafting of that memo.

The policy angle

Huang has lobbied Washington to loosen limits on chip sales to China. Trump approved sales of Nvidia's H200 chips this year. According to the Guardian's account of the Times report, U.S. intelligence agencies believe Alice Huang, acting for Beijing, pushed him to lobby Trump for looser export controls. That is an intelligence assessment, not a finding that Huang acted on anyone's behalf. Huang has made his case for easier export rules in public, repeatedly.

Anthropic and other firms have warned that selling advanced chips to China is a national security threat.

The open question is what Nvidia did after promising to revisit Megaspeed's data centers last December. It is unclear whether those follow-up checks ever happened, and the board's committee will now be asking about Huang's conduct as well.