Nvidia’s (NVDA) board is launching an independent investigation into reports that a woman CEO Jensen Huang allegedly had an affair with spied on him for the Chinese government.
In an email to employees on Sunday, Huang admitted to having an extramarital affair.
“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 wrote.
“To my colleagues at Nvidia, including those I have worked with for decades, as well as our Board of Directors, our partners and our shareholders around the world: you deserve better from me. Leading Nvidia is the privilege of my lifetime. My responsibility is to serve you and be worthy of your trust. I have not fulfilled that responsibility. I am fully committed to Nvidia and will work to regain your trust,” the CEO added.
In a statement on Sunday, the board of directors said that “a committee of independent directors, assisted by independent external counsel, would oversee the investigation” into the matter.
“While the Board has no reason to believe that NVIDIA’s national security or secrets were compromised, the Board’s investigation will consider all available information,” the board said in a statement.
The revelations follow reports of links between Huang and a woman suspected of passing information to the Chinese government.
Last month, the New York Times reported that U.S. intelligence believed that a Chinese national named Alice Huang, a former Megaspeed executive, Nvidia chip customer and someone with a well-documented relationship with Huang himself, may have acted as an intelligence agent, sharing information with Beijing’s ruling party.
Dan Ives, partner and senior managing director at Yorkville Ives, wrote in a note to investors Sunday that the investigation constitutes a “black eye” for Huang and will likely trigger several congressional investigations.
“The key question investors will be asking is: Will Jensen remain CEO of Nvidia?….The investigation will be critical and we expect Jensen to continue in his role as CEO without interruption in the near term,” Ives wrote.
“There is clearly a risk that Jensen could be removed as CEO based on the Board’s investigation, and that will add risk to the stock because it is so important to Nvidia’s story and strategy globally. It will also increase scrutiny over the sale of chips to China, which remains a key issue on the battlefield in Washington,” he added.
The US government has banned the sale of Nvidia’s advanced AI chips to China, although the company has pushed to continue offering the hardware, arguing that it is better for the world to use processors from a US company.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on @DanielHowley or contact us on Signal or Telegram.
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