Nvidia CEO Jensen Huang publicly admitted to an extramarital affair on Sunday, and the company's board immediately announced the initiation of an independent investigation. This news adds further uncertainty to Nvidia and the entire AI trading backdrop, which is already under pressure.
According to China News Service, on November 8 local time, Jensen Huang, founder and CEO of Nvidia, admitted to being unfaithful to his wife in a letter to employees, stating that his actions hurt his wife and children with no excuses, and he is willing to take full responsibility and accept criticism.
The Nvidia board released a statement that day, announcing the formation of a committee made up of independent directors, and hiring external independent legal advisors to investigate the rumors surrounding Jensen Huang. The statement said, "The board currently has no reason to believe that national security or Nvidia's confidential information has been compromised," but "will review all available information." Jensen Huang expressed support for the investigation and will fully cooperate, while a company spokesperson stated that he will continue to serve as CEO "without interruption."
After the news broke, "Jensen Huang admits to infidelity" quickly topped Weibo's trending searches. Nvidia's stock fell over 3% in after-hours trading. Meanwhile, Asian stock markets opened with divergence—Nikkei 225 index opened up 0.8%, and the Topix index's gain expanded to 2%; while the Seoul Composite Index opened down 0.5%, with initial losses further expanding to 1%.
"CEO's Extramarital Affair" Becomes the World's Top Sensation
According to media reports on the 7th citing anonymous insiders, the U.S. government believes Jensen Huang is in a romantic relationship with Alice Huang. Alice Huang once served as an executive at a cloud computing company based in Singapore. The report described their relationship as "close." In the past few weeks, the U.S. government has already launched an investigation into the close interactions between Jensen Huang and Alice Huang.
Bernstein analyst Stacy Rasgon wrote in a research report, "The nature of their 'romantic' relationship seems to have been confirmed," while the related accusations currently appear (somewhat) weaker.
Nvidia had previously denied that there was any relationship beyond ordinary business dealings between Jensen Huang and Alice Huang. According to the Global Times, a Nvidia spokesperson stated that Jensen Huang "communicates with thousands of customers every year," and such interactions "are not unusual or unexpected."
However, over the past weekend, Jensen Huang was reported to have released a letter to all Nvidia employees regarding the extramarital affair. He stated:
To my wife and family: I love you. I know that one apology cannot undo what has happened. I hope our family can slowly heal, and in time, I can regain your trust.
To my colleagues at Nvidia, including partners I've worked with for decades, the board, global partners, and shareholders: You deserve better from me. Leading Nvidia is the honor of my life. My duty is to serve you and be worthy of your trust, and I have not succeeded in that. I will continue to devote myself wholeheartedly to the work at Nvidia, striving to regain your trust.
In response to national security-related questions raised by news reports, Nvidia's board has initiated an independent investigation. I support the investigation and will fully cooperate. I love my country and this company, and I will protect Nvidia and support U.S. national security.
A screenshot of the full employee letter leaked by foreign media
Nvidia's Stock Faces "Key Person Risk"
For the market, the core question of this event is: Can Jensen Huang continue to steer Nvidia?
Yorkville Ives analyst Daniel Ives characterized this event as Jensen Huang's "black eye moment," and anticipated that it will lead to further inquiries from Congress. He warned:
Depending on the findings of the board's investigation, Jensen Huang is very likely to be removed from his position as CEO, which will pose risks to the stock price as he is critical to Nvidia's global development and strategy.
Stacy Rasgon directly pointed out Nvidia's "key person risk." He wrote that if Jensen Huang "is unwilling or unable" to lead the company, it is currently "unclear who would (or could) succeed." He added, "This whole situation, at least on the surface, is very bad."
Both analysts believe this incident may keep Nvidia's stock under sustained pressure for some time.
On social media, independent analyst Jukan expressed similar concerns: "In this intensity of industry competition, the CEO's attention and energy are scarce resources. Jensen Huang will have to expend a lot of mental energy to deal with family matters, which will inevitably encroach upon the bandwidth originally used for company strategy, execution, and external dealings."
Congressional Pressure: Political Risks Compound
The timing of this incident coincides with Nvidia facing multiple pressures from Congress.
According to the Global Times, after the U.S. midterm elections, the Democratic Party gained full control of both chambers of Congress, and tech giants that previously had close relations with the White House are now facing new political challenges. According to Bloomberg, AI companies that have had close ties with the White House over the past two years are preparing to respond to the consequences of the Democratic Party's victory in the midterm elections.
Prior to this, three Republican committee chairs in the House had co-signed a letter requesting Jensen Huang to attend a closed briefing on November 18 to explain the relevant interactions and Nvidia's security protocols. Reports indicate that Democrats plan to introduce a set of AI-related bills covering consumer protection, independent testing requirements, and liability issues.
According to Hu Xijin's analysis, within two trading days after the midterm elections, U.S. AI sector stocks experienced severe fluctuations, and Jensen Huang's personal net worth decreased by $15.1 billion. Hu Xijin predicts that Jensen Huang and Musk will go through a round of troubles, and those minor congress members will take this opportunity to flex their authority, but the possibility of these top executives being brought down is minimal.
Another Layer of Pressure on AI Trading
Prior to this incident, AI-related stocks were already under pressure from multiple factors.
Since this autumn, AI stocks have been pressured by market concerns regarding the sustainability of AI spending, tightening financing environments, and underwhelming performances from some major tech companies. As the core player in AI trading, Jensen Huang's personal turmoil undoubtedly adds another variable on top of the existing pressures for Nvidia.
A Nvidia spokesperson stated in a statement: "Today's news will not slow Nvidia down." The board also stated in its announcement, "We are confident in Jensen Huang and his leadership team and will announce further progress at an appropriate time."
However, for investors, when the investigation results will be released and whether Jensen Huang's position remains stable is still the biggest uncertainty at present.
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