Nvidia announced an independent investigation after reports emerged that CEO and co-founder Jensen Huang had been targeted by a foreign intelligence operation, The Guardian reported. The company's stock declined to $US176.16, a drop of $US10.48, following the reports.
The board said it found no basis to think either national security or company secrets had been exposed, while committing its inquiry to review all available information and expressing confidence in Huang's leadership. The board stated that US national and economic security takes precedence over the interests of Nvidia and its shareholders, and indicated it would issue further updates as the inquiry progresses.
Alice Huang, unrelated to Jensen Huang, was suspected of helping entities get around US chip export controls, which led US officials to place her under surveillance. That monitoring produced communications with Jensen Huang, whose identity was established through an unmasking process.
She served as a top executive at Megaspeed between March and November 2023. Nvidia said Megaspeed had previously been investigated for evading export controls, and separately the company faces accusations of helping restricted Chinese entities obtain Nvidia AI chips.
A memo drafted under Secretary of State Marco Rubio's direction, circulated among senior Trump administration officials last spring, referenced intelligence describing the businesswoman in a relationship with Jensen Huang as a spy working for China's ministry of state security, the New York Times reported. According to the New York Times, Trump received an intelligence briefing roughly a year ago on Alice Huang's alleged connections to Chinese intelligence but did not act on it.
Trump told reporters he considered Huang an honourable person and said he had not heard that Huang had done anything wrong. China's Foreign Ministry spokesperson Guo Jiakun told reporters at a regular daily press briefing that the spying allegations were groundless and intended to smear China.
A letter from three House Republican committee chairs invited Huang to attend a closed-door lawmakers' briefing on 18 November. The Republican committee chairs asked Huang to address lawmakers on the subject of Nvidia's defences against foreign adversary espionage and on his personal connection to Alice Huang. Senator Chris Coons, a Delaware Democrat, wrote on X that he was calling for an investigation into Jensen Huang and Nvidia over whether US national security had been put at risk.
An Nvidia spokesperson told CNBC that Megaspeed is a regional cloud customer like others, that Jensen Huang meets thousands of customers annually so his contact with Megaspeed officials is unremarkable, and that customers receive only ordinary business information rather than trade secrets or anything touching national security. Third-quarter earnings for Nvidia are scheduled for 17 November, meaning the investigation and share price decline precede a major financial reporting event.
Reporting: The Guardian, ABC News, BBC, CNBC
Background: CNBC
Written by Pick & Scroll News from the reporting and documents linked above.
