Nvidia Crisis: The China Connections, CEO Controversy And $600 Billion Rout

The Nvidia crisis that shook the tech world has moved beyond the allegations against its CEO, Jensen Huang, who may be on his way out. It combines corporate governance, Chinese espionage operation and billions of dollars in market losses. Along with Huang, Singapore-based Megaspeed and its former top executive Alice Huang are also being probed for circumventing US export restrictions to prevent Beijing from acquiring cutting-edge AI chips. The US, which aims to maintain its lead in the AI space, will now intensify scrutiny of technology transfer to China.

READ | Nvidia CEO Jensen Huang Was Introduced To Alleged Chinese Spy By Her Husband: Report

Here's what all has happened since the crisis was reported:

The bombshell report: In late October, a New York Times report alleged that the Nvidia CEO is in a relationship with Alice Huang who the US suspects of being a Chinese intelligence asset. Beijing has denied all the allegations.

Jensen Huang's admission: The Nvidia CEO acknowledged being unfaithful to his wife in a message to employees. The Nvidia board is expected to fire Jenseng Huang and according to Reuters, engineering veteran Ian Buck and Chief Financial Officer Colette Kress are among the frontrunners. Huang's daughter Madison is also being discussed as a possible future leader.

Nvidia's investigation: The company hired former US federal prosecutor Joon H Kim and law firm Watchell, Lipton, Rosen & Katz to conduct an independent investigation.

A second affair? The New York Times reported another allege relationship, this time involving Nvidia executive Kimberley Powell. She joined the company in 2008 and reported to Huang. Powell oversees the company's worldwide healthcare business, including hardware and software platforms for accelerated computing, AI, and visualisation that power the ecosystem of medical imaging devices, life sciences, drug discovery, and healthcare analytics.

Nvidia's $600 billion slide: Nvidia's board is holding an emergency meeting today to decide who will succeed Jensen Huan, who has never anointed a successor. The entire crisis has contributed to a $600 billion selloff of Nvidia's shares this week, making it the world's second-most valuable company, according to Reuters.

Till now, Nvidia has maintained it has "no reason to believe" that either national security or Nvidia secrets were compromised, but that its inquiry would examine all available information.