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US President Donald Trump said the FBI has opened an investigation into the circumstances of the romantic relationship between Nvidia CEO Jensen Huang and an alleged Chinese intelligence officer. Meanwhile, the scandal surrounding the head of one of the largest technology companies in the United States caused a sharp drop in stock prices, Nvidia's market value decreased by hundreds of billions of dollars.
On Monday, Trump told reporters that he spoke with Huang after reports emerged of his extramarital affair with a woman suspected of working for Chinese intelligence agencies.
On Sunday, Huang admitted that he had cheated on his wife, and Nvidia began an independent investigation into the situation. The company also said that, according to its data, there was no leak of classified information, and US national security was not affected.
Chinese authorities said they did not conduct intelligence operations against Huang. The country's Foreign Ministry called such accusations "completely baseless, speculative and intended to denigrate and slander China."
“I asked him: “Did you know that she was a spy?” He replied: “I had no idea she was a spy.” And I completely trust him,” the US president told reporters about his conversation with the head of Nvidia.
Last week, publications appeared in the press that, according to American intelligence services, Huang cheated on his wife with a woman named Alice Huang (she is the namesake of the head of the American company, not his relative), working for Chinese intelligence. Alice Huang is associated with Singapore-based Megaspeed, which operates data centers and buys chips from Nvidia.
Trump told reporters that the FBI is now looking into the matter, but did not say when the investigation began or provide other details. The FBI declined to comment to the BBC.
“I know the FBI is looking into it in terms of some other things, but I think he'll be fine,” Trump said. “I know Jensen very well.” I think he is a very worthy person. He's built a great company, an American company, and I think he's a very decent guy."
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Congressional investigation
Trump has previously expressed concerns that global leadership in artificial intelligence could allow China to significantly strengthen its military and intelligence capabilities.
The US president expressed confidence that Chinese leader Xi Jinping will “ask me” about the Huang story during their next meeting.
The following week, the CEO and founder of Nvidia was also called to testify before several US Congressional committees. Among other things, his presence at the closed meeting was demanded by members of the Foreign Affairs Committee: they intend to ask Huang about his connection with Alice Huang and what measures the company is taking to combat espionage.
“Recent reports raise serious national security concerns regarding China's access to sensitive U.S. technology and information,” the three U.S. congressmen said in a letter. “It is critical that Congress determine the extent to which American national security may be at risk.”
Nvidia shares fall
Amid the scandal surrounding the Nvidia boss, other heads of technology companies spoke out in his support, including the head of Space X and Tesla, Elon Musk.
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Meanwhile, information about Huang's connection with an alleged Chinese spy triggered a significant drop in Nvidia shares. By the end of trading on Monday, their rate fell by 4%, which reduced the company's market capitalization by about $250 billion. However, Nvidia is still worth around $4.3 trillion, making it one of the most valuable in the world.
As BBC business correspondents note, the fall in Nvidia shares is likely not to be long-term. Market analyst Victoria Fernandez of Crossmark Global Investments believes that investors will not withdraw money from the company because it is so important to the artificial intelligence industry.
"Nvidia is at the heart of the AI business, without it the rest of the system will start to fall apart," she told the BBC.
According to our correspondents, investors are primarily concerned about what will happen to the company if Huang is forced to step down. There is no "obvious successor" to him, Fernandez said.
Jensen Huang founded Nvidia along with other engineers in 1993 and has been its leader ever since. His chips were originally intended for computer games, but Huang was one of the first to rely on artificial intelligence technologies.
At the same time, unlike other founders of large American technology companies, Huang depends on the decisions of the board of directors, which can fire him.
Huang only owns about 3.5% of the company, and Nvidia's management structure prevents him from vetoing a potential layoff.
However, other American tech bosses, including Meta chief Mark Zuckerberg and Elon Musk, own significant stakes in their companies.
However, Fernandez does not think that Nvidia's board of directors will decide to fire Huang - unless it finds very significant evidence of violations that posed a threat to national security or the company's intellectual property.
“But I’m sure that they will start making someone number two, so that this person will be there for the future,” the expert believes.
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