Nvidia’s stock slid about 4% on Monday after the company announced that it had opened an investigation into CEO Jensen Huang’s relationship with a woman that U.S. intelligence agencies say is a Chinese spy.

The probe has the potential to unsettle the entire AI boom, fueled by trillions of dollars of spending and investments, in part to purchase Nvidia’s cutting-edge AI chips. Nvidia’s drop wiped out more than $200 billion in value.

The CEO, who also founded the company more than three decades ago, admitted in a note to employees he had been unfaithful to his wife. “To my colleagues at NVIDIA, including those I have worked alongside for decades, and to our board, partners, and shareholders around the world: you deserve better from me,” Huang’s email also said.

In recent days, the Financial Times and The New York Times reported that Huang had a relationship with a Chinese businesswoman named Alice Huang. A person with knowledge of the matter told NBC News that U.S. intelligence agencies had determined that Alice Huang was a Chinese spy. The two Huangs are unrelated.

China has dismissed the espionage allegations as a “smears.” The company where Alice Huang allegedly works, Megaspeed, did not return requests for comment.

“A committee of independent directors, assisted by outside independent counsel, will oversee the investigation,” Nvidia said in a Sunday statement. “The Board prioritizes U.S. national and economic security, which is paramount to the interests of NVIDIA and its shareholders.”

An Nvidia spokesperson told NBC News that Huang was “committed to continuing to lead NVIDIA as CEO without interruption.”

Before the Huang revelations, the tech industry was on edge, with every headline about AI-linked companies sending stocks either soaring or tumbling. Just last week, tech stocks surged after it became clear on Election Night that the Democrats would win majorities in Congress. But stocks plunged the next day. On Thursday, stocks suffered their worst one-day drop since Trump rocked the global economy with his initial wave of tariffs in April 2025.

Given that there are few more important companies to the tech sector overall, investors and even market watchers not invested in Nvidia shares will be closely following the investigation.

There are still many unanswered questions. On Sunday, Nvidia’s board said it had “no reason to believe that either national security or NVIDIA secrets were compromised.” But, it did not provide a timeline related to how fast the probe would be conducted or any other details about Huang’s contact with Alice Huang.

Jensen Huang’s influence

Jensen Huang has become one of the main forces driving the global AI push while steering Nvidia to a market value of more than $4 trillion. Huang has led Nvidia since he founded it in 1993, so it would be a seismic change if he were to leave the role.

Huang is the largest individual holder of shares, outside of investment funds, and he is not protected from removal if the board decides to do so. His stake in shares of Nvidia are worth about 3.5% of its shares outstanding, but unlike other major tech firms like Meta, Nvidia has just one class of shares.

Trump on Sunday gave Huang his support, which likely reduces the chance that he is removed as CEO in the near term. “I just know he’s a fine person, but you never know what is going on.”

The president was asked if Huang should remain CEO of Nvidia, to which he replied: “I think so. Oh yeah, sure.”

In early trading, the Nvidia news affected almost no other stocks. The Nasdaq 100, which tracks the top tech stocks at the Nasdaq exchange, soared 3%. The broader S&P 500 2%. The Dow Jones Industrial Average rose almost 900 points. Stocks were also propelled higher by a sharp 5% drop in oil prices on Monday, on news that U.S. and Iran talks were continuing. Trump also told CNN on Sunday that it would be “highly unlikely” that he would restart major combat operations against Iran.

Nvidia’s peers, such as AMD, Qualcomm, Taiwan Semi and Intel, all rose along with the broader market. Nvidia was the biggest loser on the Dow, the Nasdaq 100 and S&P 500.

With so many outstanding questions about the Huang scandal, few major analysts that cover Nvidia had weighed in on Monday morning about what it could mean for the company’s future.

But those who did said it was a blemish on an otherwise sterling track record, which could spark even more investigations.

“This is a black eye moment for Jensen and will spark multiple congressional inquiries at a minimum and will create an overhang on the stock for a myriad of reasons,” wrote Dan Ives, of Yorkville Ives. “There is clearly risk that Jensen could be removed as CEO depending on the Board investigation and this will add risk to the stock as he is so important to the Nvidia story and strategy globally.”

Chip analyst Stacy Ragson of Bernstein Research summed up the gravity of the revelations: “NVIDIA is not an ordinary company and Jensen is not an ordinary CEO; he IS NVIDIA.”