Nvidia shares kept falling today (Tuesday), a day after losing 4.3% and nearly $200 billion in value over the affair surrounding CEO Jensen Huang. Investors are trying to gauge how long the uncertainty will last, and one analyst estimated the board's review could take four to six weeks and weigh on the stock until findings are published.
Law firm Rosen Law Firm said it filed a class action in federal court in San Jose, California, against Nvidia and Huang. According to the announcement, the suit alleges the company and its CEO failed to disclose to shareholders information about his relationship with Alice Huang, a former senior figure at Singapore's Megaspeed whom US intelligence officials suspect of working for Chinese intelligence. Suits like this are filed almost automatically after any sharp drop in a stock, and the road from them to compensation is long.
The more significant front is Megaspeed itself. According to reports in US media, the Justice Department's National Security Division is investigating the company on suspicion of violating export restrictions on advanced AI chips. The investigation began at the Commerce Department and, according to The New York Times, was halted there after Nvidia's general counsel reached out, and was moved to the Justice Department. Megaspeed denies smuggling chips, and Huang has said Nvidia examined all of the company's deployments 'and counted every one' of the processors.
President Trump said he spoke with Huang and that the CEO denied knowing the woman 'was a spy' for China. Nvidia said Huang remains in his post and that the events 'will not slow' the company. In his letter to employees, Huang wrote that he is 'deeply sorry.'
Meanwhile the calendar keeps filling up. The chairs of three House committees asked Huang for answers by tomorrow, November 11, and proposed a briefing on the 18th. And next week Nvidia is expected to report quarterly results. Normally, those results would be the week's big market event. This year, questions about the board and Megaspeed are likely to crowd out questions about processor demand.
