Nvidia shares tumbled more than 8 per cent as trading opened in the US markets hours after the company launched a probe into its Chief Executive Officer (CEO) Jensen Huang over his affair with a woman who is suspected of being a spy for China.
The shares of the artificial intelligence leader were down sharply at pre-market trading on the Nasdaq index, and at the opening bell nosedived more than 8 per cent to $171.80 apiece.
However, it quickly recovered some losses to trade at $177.85 at the time of writing this article. The stock was still down by around 4 per cent.
The revelation of Huang's affair has raised concerns over his future at the company, which he co-founded over 30 years ago, and made it the biggest company in the world over the decades.
READ | China Hits Back After Claims Of Plot To Ensnare Nvidia CEO Jensen Huang
Nvidia Launches Probe
Nvidia's announcement regarding the CEO's investigation came hours after Huang's acknowledgement on Sunday that he had been intimate with a business executive. According to a New York Times report last month, US authorities suspected the executive, Alice Huang, was gathering information for China.
China has rejected the spying claims, with its foreign ministry calling the allegations a smear campaign against Beijing on Monday.
In an email to his employees on Sunday, Huang admitted to his affair and said he owed an apology to them and his family.
READ | A Chinese Spy, Nvidia's CEO And A Secret Memo That Reached Marco Rubio
"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," he wrote.
Nvidia's board, in a statement on Sunday, said it was launching an independent probe "in light of recent reporting that founder and CEO Jensen Huang has been the target of a foreign intelligence effort".
It said the board "has confidence in Jensen".
"The Board prioritises US national and economic security, which is paramount to the interests of NVIDIA and its shareholders," it added
Big Tech Boosts Wall Street
Despite Nvidia's poor performance at the opening bell, tech stocks rose to boost Wall Street as a whole.
Crude prices fell more than 4 per cent on diplomatic hopes concerning the US-Iran war, while several tech giants like Google parent Alphabet and leading AI companies such as Micron were higher after a big selloff on Thursday.
Shares of big tech companies, including Apple, Meta, Alphabet, and Microsoft, rose up to 5 per cent during early trading on Monday. Nasdaq composite soared 1.4 per cent on tech gains.
Overall, lower oil prices boosted US markets as they recovered from last week's losses.
The S&P rose 1.1 per cent and was on track for a second straight gain following a wipeout on worries that Democratic victories in the US midterm elections could mean a slowdown in the construction of AI data centres. The Dow Jones Industrial Average was up 606 points, or 1.2 per cent, as of 9:35 am Eastern time
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