Nvidia opened an investigation into whether Chief Executive Jensen Huang had been targeted by foreign intelligence after he acknowledged an affair in a letter to employees, Bloomberg reported.
The admission reversed Huang's earlier description of the relationship as normal business dealings. His board said it would investigate, and he would cooperate, Bloomberg Technology reported in its Nov. 9 broadcast.
Huang sent the letter over the weekend and apologised to employees. The broadcast described the woman as an executive at Singapore-based Mega-Speed and said she allegedly had ties to Chinese intelligence.
The supplied remarks did not establish those alleged intelligence ties or whether Huang had shared confidential information. They also gave no timetable for the company's investigation or decision on his position.
In an interview recorded last month, Huang defended his efforts to persuade U.S. policymakers to allow Nvidia to keep selling into China. He said engaging Chinese customers was important to the company.
“I think we made a mistake and this mistake is hard to unwind,” Huang said. He did not specify in that excerpt which policy decision he meant.
Huang also distinguished commercial competition from hostility. “They are not our enemies,” he said of China, while discussing Chinese artificial intelligence researchers and their work in laboratories.
Nancy Tengler, an investor whose holdings include Nvidia, said she was not buying more shares that day. She said the allegations complicated her assessment of a company she had considered inexpensive.
Tengler said that view did not depend on believing earnings would grow 70% next year. She did not identify the source of that growth expectation in the interview.
She said demand for chips and the company's existing orders could outlast Huang's tenure. But his departure would change her assessment of Nvidia's strategy and could prompt her to sell into a price rise.
“Everybody is replaceable, including me,” Tengler said, citing Apple's performance under Tim Cook after Steve Jobs. She said the identity of any replacement would matter to her investment decision.
Tengler also said she would reconsider her holding if evidence showed Huang knowingly helped China obtain chips improperly. The interview did not establish that he had done so.
President Donald Trump said the previous day that he had not discussed the matter with Huang. “I just know he is a fine person, but you never know what is going on,” Trump said.
Three Republican congressional committee heads asked Huang to appear behind closed doors on Nov. 18. That would follow Nvidia's quarterly results scheduled for Nov. 17. The broadcast did not say whether he had agreed to appear.
