SEOUL/SYDNEY: An internal investigation into whether a foreign intelligence effort targeted Nvidia CEO Jensen Huang has put his future at the AI chipmaker under scrutiny. Huang has been the most prolific salesman of the AI boom at the world's most valuable chipmaker.

The probe, announced on November 8, followed a media report that Huang had a close relationship with a Chinese businesswoman who allegedly passed information to Beijing. Huang told Nvidia's employees that he had been unfaithful to his wife, without disclosing details of the relationship.

Nvidia said its board has confidence in Huang. Some analysts said the company has no natural successor in case he decides to step down.

Analysts said a prolonged investigation or internal review could potentially delay Nvidia's investment decisions or product launches, with broader implications for the semiconductor industry. Ryu Young-ho, a senior analyst at NH Investment & Securities, said Nvidia's products would be difficult to replace, limiting the potential impact, although shipments to China could face further delays depending on how the situation develops.

South Korea's deputy science minister said on November 9 that the government expected no disruptions to contracted deliveries of Nvidia graphics processing units despite issues currently facing the company.

Nvidia shares tumbled around eight percent in early trading on November 9.

"The market's probably telling you now this does no favors to the stock whatsoever in a time when there's a lot of conjecture as to the build-out of data centers," said Chris Weston, head of research at brokerage Pepperstone in Melbourne. But Weston said he did not think Huang, whom he described as the "godfather of AI", would be replaced.

Huang is Nvidia's fifth-largest shareholder with a roughly 3.6 percent stake, according to LSEG data, and maintains tight control through an unusually flat structure in which dozens of executives report directly to him. But unlike Meta Platforms or SpaceX, Nvidia has no dual-class shares that would give its co-founder majority voting control.

The New York Times reported last month that Huang had a relationship with Alice Huang, an unrelated former executive of Singapore-based company Megaspeed, who U.S. authorities investigated and concluded was a Chinese intelligence asset.

"The so-called Chinese spy narrative is purely a groundless accusation, slander, and a smear," Chinese Foreign Ministry spokesperson Guo Jiakun told reporters in Beijing.

Billionaire investor Bill Ackman said on X the Nvidia CEO was an "incredible human", but if "indeed this is more than an affair, then it is obviously a real problem".

U.S. President Donald Trump said he had not spoken to Huang about the allegations, but called him a fine person. Asked if he believed he should have acted on intelligence when he was briefed about it, Trump said: "No, I don't think so. I think he's an honorable guy. I think he probably has an excuse for it. You have to hear it." The New York Times reported that Trump was briefed on the intelligence findings about a year ago and chose not to act on the information.

The fallout extended to South Korea, where Madison Huang, Huang's daughter and an Nvidia executive, canceled a planned visit to Seoul for an Nvidia conference, according to companies she had been scheduled to meet. 

South Korean AI startup Rebellions said it canceled events with her due to "unavoidable internal circumstances at Nvidia." Nvidia AI Day Seoul, a two-day event expected to draw about 2,000 participants, will proceed as planned, according to South Korean media.