Nvidia Shares Fall More Than 6% Amid Claims of $7.5 Billion in Chip Shipments to China
Key Facts
Nvidia shares fell more than 6% on Tuesday, November 10, after declining 4.3% in the previous session, as scrutiny intensified over a report that chips worth at least $7.5 billion had been shipped to Chinese companies. Reuters, citing a report by The Information, said CEO Jensen Huang’s relationship with Alice Huang helped facilitate the shipments. Reuters said the report was based on two people who know Alice Huang, but it could not independently verify the account of the shipments. The decline coincided with the start of an Nvidia board investigation into whether Huang was targeted in a foreign intelligence operation, and with the FBI examining the matter. The drop in Nvidia shares allowed Microsoft to overtake it as the world’s second-largest company by market capitalization for the first time since June 2025.
According to the report cited by Reuters, the alleged network included Alice Huang, her husband and her sister, who built companies in China and Singapore to acquire Nvidia chips. At its center was Shanghai Century LeTong, which became a preferred cloud partner of Nvidia in 2023, giving it priority access to chips. The report said Alice Huang helped move about 240,000 H100 and H200 chips, along with some A100 chips, to China. It said the moves came after orders subject to U.S. export restrictions stalled. That placed the alleged shipments at the center of a debate over export controls and access to advanced chips, while Reuters has not independently verified the report’s account.
Nvidia’s board said the investigation, which began on Sunday, would examine available information on whether Huang, 63, was targeted in a foreign intelligence operation. The board added that it saw no reason to believe national security or company secrets had been compromised, and that a committee of independent directors and an independent outside lawyer would oversee the investigation. Reuters treated the investigation as separate from the allegations of chip shipments; it did not confirm that the probe was examining those shipments specifically. Bank of America analysts said the question for investors was whether the issue would remain contained within the company or lead to broader restrictions or disruption in AI infrastructure. They added: "Allegations should not be equated with proven commercial harm."
Pressure spread to companies tied to data center and AI infrastructure. Shares of GE Vernova fell 6.2%, Micron Technology declined 3.7%, and CoreWeave dropped 2.2% on Tuesday. The Associated Press said Nvidia shares were the single biggest drag on the S&P 500 after falling 6.3% in the session. The news agency linked the sector’s weakness to concerns that valuations had risen too far and to the possibility of restrictions on building AI data centers. It said Democratic victories in state legislatures the previous week had raised concerns about potential construction limits. A Chinese foreign ministry spokesman called the espionage allegations "unsubstantiated" and "nothing but slander against China," denying any attempt to lure Huang.
The company also faces a proposed class-action lawsuit filed by an investor against Nvidia and Huang, accusing them of misleading investors. The suit seeks to represent people who bought the company’s shares between October 9 and November 8, 2026. Nvidia did not immediately respond to a request for comment, according to the Associated Press. The case comes as the company’s market capitalization exceeds $4 trillion and AI developers rely on its chips, giving developments around the company significance beyond its share performance alone. In a previous disclosure for the second quarter of fiscal 2027, Nvidia said shipments of Hopper H200 products to customers in China under U.S. licenses accounted for less than 1% of data center revenue in that quarter, and that its outlook did not include data center computing revenue from China.
Export applications for H200 and similar chips to China are subject to case-by-case review by the U.S. Department of Commerce. The Bureau of Industry and Security said license applicants must show that exports would not reduce semiconductor production capacity currently available to U.S. customers. The review defines the regulatory framework around demand for advanced chips, while the ongoing investigations focus on separate issues including Huang’s security, corporate governance and the alleged shipments. The fiscal period covered by the company’s results ended on October 25, 2026. Nvidia is scheduled to hold a conference to discuss its third-quarter fiscal 2027 results on Tuesday, November 17, at 2 p.m. Pacific Time, or 5 p.m. Eastern Time.