Nvidia's board has opened an independent investigation into whether chief executive Jensen Huang was the target of a foreign intelligence effort, after a news report alleged he had a close relationship with a Chinese businesswoman who passed information to Beijing.

The company said over the weekend that a committee of independent directors, assisted by outside independent counsel, would oversee the inquiry, and that it had no reason to believe either American national security or Nvidia's secrets had been compromised. It said the inquiry would examine all available information.

And the chief executive addressed part of it himself. In a message to employees, Huang said he had been unfaithful to his wife and took full responsibility for his actions, while the company said he was committed to leading Nvidia without interruption and would cooperate with the review.

The allegation itself comes from the New York Times, which reported last month that Huang had a relationship with Alice Huang, an unrelated former executive of the Singapore based company Megaspeed, whom American authorities investigated and concluded was a Chinese intelligence asset.

That company is the reason the story carries weight beyond a boardroom. Megaspeed buys AI chips from Nvidia and has been scrutinised over suspicions it helped Beijing obtain advanced processors that are barred from shipment to China, so a relationship between the two becomes a security question rather than a private one. Megaspeed did not respond immediately to a request for comment made outside business hours.

But the political reaction arrived quickly. President Donald Trump said he had not spoken to Huang about the allegations and called him a fine person, adding that he hoped everything was fine and that Huang had done an incredible job, while the New York Times reported that Trump had been briefed on the intelligence findings about a year earlier and chose not to act on them.

But the financial pressure is the part investors will price. Nvidia is worth about 4.5 trillion dollars and its shares have given up all their gains this year amid a wider retreat over the pace of AI spending, so an inquiry that touches the chief executive lands on a company already being marked down.

Analysts are saying the quiet part plainly. Dan Ives of Yorkville Ives said there is clearly a risk that Huang could be removed as chief executive depending on the board investigation, which would add risk to the stock given how central he is to Nvidia's strategy and its standing with customers, and he called it a black eye moment for the man who has run the company for more than three decades.

So the sequence to watch is the committee rather than the headlines. Nvidia has framed the review as a fact finding exercise with no finding of compromise, Huang has said he is committed to protecting Nvidia and supporting America's national security, China's foreign ministry did not immediately respond to a request for comment, and the board's conclusion is what decides whether this is a reputational episode or a succession question.

• Nvidia's board opened an independent investigation overseen by independent directors

• The inquiry looks at whether Jensen Huang was targeted by a foreign intelligence effort

• Huang told employees he had been unfaithful to his wife and took full responsibility

• Nvidia says it has no reason to believe US security or company secrets were compromised

• Alice Huang is a former Megaspeed executive US authorities concluded was an intelligence asset

Source: Reuters