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Nvidia shares tumbled 5% in premarket trading Monday after the technology giant opened an investigation into CEO Jensen Huang’s relationship with a businesswoman whom United States intelligence agencies say is a Chinese spy. The stock was last trading down 5.2% before the market opened.

Alice Huang, an executive at cloud company MegaSpeed, has been passing information to Beijing, according to reports in The New York Times and The Financial Times that cited United States intelligence agencies.

Nvidia said its board launched an independent investigation after reports indicated that Jensen Huang had been targeted by a “foreign intelligence effort.” The company said Sunday that Huang “fully supports the review and has committed to cooperating with it.”

The cofounder and CEO also told Nvidia employees that he had failed to meet his responsibilities to colleagues, the board, business partners and shareholders around the world. The message amounted to a striking personal admission as scrutiny intensified around his leadership.

“I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry,” Huang said in the email to employees.

China rejected the espionage claims. Foreign Ministry spokesperson Guo Jiakun said Monday that the “so-called Chinese spy narrative” was unsubstantiated, according to Reuters.

The board investigation has stirred questions about whether Huang can remain at Nvidia’s helm. Dan Ives, senior managing director at Yorkville Ives & Co., pushed back sharply against speculation that the company could replace its celebrated chief executive.

Ives told CNBC’s “Squawk Box Europe” that any discussion of replacing Huang was “comedy.” Still, he described the probe and affair as a “game changer” for both the executive and Nvidia, even as he maintained that the company remains two to three years ahead of China in artificial intelligence chips.

“You’re talking about what I would view as a torchbearer — the leader of AI technology — not just in the U.S. but globally. So I think the fact that we’re in this situation, from an investor perspective, the clear worry is, does Jensen stay on as CEO? The Street would say probably likely, but given the board investigation, anything could happen, and that creates a huge uncertainty.”

The turmoil arrived after technology stocks suffered heavy losses last week as investors reconsidered the data center buildout following Democrats’ victory in taking control of Congress. Asian technology shares rose across the region Monday, recovering from Friday’s declines.

Shares of other United States chipmakers were slightly lower in premarket trading, although their moves were smaller than Nvidia’s fall. Intel, Marvell, Qualcomm and Arm were each down more than 1%.

Joachim Klement, investment strategist at Panmure Liberum, said the immediate damage appeared contained to Nvidia. He warned that broader pressure could emerge if Huang’s position becomes “endangered” and Nvidia responds by reducing support for other companies in Asia or the United States.

Klement said such a retreat “might then spread a little bit more into the other semiconductor names.” His comments highlighted the possibility of wider industry consequences if Nvidia’s leadership uncertainty begins affecting its relationships with other businesses.

President Donald Trump praised Huang’s record Sunday but said he had not spoken with the executive about the investigation. “I think he’s an honorable guy. I think he probably has an excuse for it. You have to hear it,” Trump told reporters.

“He’s done an amazing job for our country,” Trump added. The president’s remarks placed him among the prominent figures offering support for Huang while Nvidia’s board conducts its review.

Sequoia partner Shaun Maguire also defended Huang in a post on X, calling him “one of the greatest entrepreneurs of this generation.” He added: “two mistakes don’t make a right, and I believe Jensen is irreplaceable for America’s AI leadership.”

SpaceX and Tesla CEO Elon Musk reshared Maguire’s post and said he agreed with the venture capitalist’s statements. Nvidia is scheduled to report third quarter earnings on Nov. 17 and hold a major conference in Washington, D.C., at the end of the month.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.