Nvidia Shares Drop 6% Amid Investigation into CEO

In the U.S. on Monday morning, Nvidia shares traded approximately 6% lower, which could reduce the company's market capitalization by $270 billion compared to the $4.5 trillion valuation at the close of the previous session. Over the past month, the stock has already declined by 20%.

The drop occurred against the backdrop of a broader decline in technology company shares. Investors fear that artificial intelligence infrastructure will be built more slowly than expected. Among the reasons for these concerns are the high debt burden of neocloud companies and the success of Democrats in the U.S. midterm elections, which could slow the construction of data centers.

Nvidia's board of directors has begun an investigation into whether CEO Jensen Huang became the target of a foreign intelligence operation. The day before, Huang informed employees that he had been unfaithful to his wife, Lori Huang, with whom he has been married for over 40 years. He apologized to his family, supported the investigation, and pledged to fully cooperate with it.

Earlier, U.S. intelligence agencies determined that Huang had a close relationship with Alice Huang—a Chinese citizen and former head of Singapore-based Megaspeed, a data center company. U.S. officials suspected that the company was funneling advanced Nvidia chips to China and considered Alice Huang to be an employee of Chinese intelligence. At the time, Nvidia stated that Jensen Huang's contacts with her were neither unusual nor unexpected.

The decline in share prices is also attributed to concerns over Huang's potential departure. Investor Mohamed El-Erian noted that Nvidia faces significant risk due to the company's dependence on a single key executive.