Nvidia appoints independent investigator as shares fall more than 6% in one day
Key Facts
Nvidia announced on November 10 that its independent directors had hired John Kim and the law firm Wachtell, Lipton, Rosen & Katz to conduct an independent and comprehensive investigation, after the board announced on Sunday that it was opening one. The company said Kim previously served as acting U.S. attorney for the Southern District of New York, a description of his former role in federal prosecution. His appointment and that of his firm move the matter from an investigation announcement to an independent review. The board said the review would cover all available information. But it said it had “no reason to believe” that national security or Nvidia’s secrets had been compromised. The investigation follows reports of alleged foreign intelligence targeting of the company’s chief executive, Jensen Huang, while the board has announced no finding establishing a breach or those allegations.
The Associated Press said Huang acknowledged to the board that he had an intimate relationship with a female business executive. The agency attributed to The New York Times a report that U.S. intelligence had concluded the woman was gathering information for Beijing. That account remains attributed to media reports and is not a finding announced by Nvidia’s board as part of the investigation. The company said Huang supported the review and had pledged to cooperate. The Associated Press reported that he would remain chief executive during the investigation and was 63 at the time of its report. Company spokesman John Rizzo said, “Today’s news will not slow Nvidia,” adding that Huang was committed to continuing to lead it without interruption.
The board did not rule on the accuracy of the reports, saying the investigation would examine available information while maintaining its stated position that there was no reason to believe a breach had occurred. In Washington, President Donald Trump said on Monday that the FBI was “looking into it,” according to the Associated Press. Chinese Foreign Ministry spokesman Guo Jiakun also rejected the espionage allegations, calling them “baseless allegations” and “nothing but a smear of China.” These positions place the matter in a security and political context alongside the corporate review commissioned by the board. The Associated Press reported that Huang had pressed Washington to ease restrictions on Nvidia chip sales to China. The agency quoted analysts as saying they feared the allegations could strengthen calls for tighter export controls, without that meaning that commercial harm to the company had been established.
The sensitivity of the matter is also tied to chip sales to China. The Associated Press, citing The New York Times, said Megaspeed had bought more than $4.8 billion worth of Nvidia chips during the previous two years. The agency reported that AI developers rely on the company’s chips, while describing its market capitalization as exceeding $4 trillion. But the company’s size and position in the chip supply chain do not settle the accuracy of the allegations or establish that its secrets or national security were compromised. The board’s review remains separate from published reports and the political debate over exports. Bank of America analysts said, according to Reuters, that the question for investors was whether the matter would remain company-specific or lead to broader restrictions and disruption to the AI infrastructure. They cautioned against equating allegations with proven commercial harm.
The decline was reflected in two consecutive closes, though the figures alone do not establish that the investigation caused the move. EL7 data showed Nvidia closing at $178.67 on November 9 and then $166.90 on November 10. Reuters said the stock fell more than 6% on Tuesday, after declining 4.3% on Monday. The agency added that Microsoft briefly overtook Nvidia to become the world’s second-largest company by market value, for the first time since June 2025. The Associated Press describes the company as highly important on Wall Street and a supplier of chips relied on by AI developers. In a separate filing, the agency reported that a shareholder sued Nvidia and Huang in federal court in California on Monday, accusing them of misleading investors in their responses to media reports.
The next quarterly results are the nearest dated disclosure milestone for investors. Nvidia said it would hold a conference call on November 17 to discuss results for the third quarter of its 2027 fiscal year, which ended on October 25, 2026. The board’s statement did not set a date for the investigation to conclude or for its findings to be published. Huang continues in his role during the review, while the company says he will cooperate and that the matter will not slow its business. Pending the investigation’s findings, the board’s stated position remains that it has no reason to believe the company’s secrets or national security were compromised. The earnings call will give the company an opportunity to discuss its financial performance, while it has announced no corresponding date for resolving the board’s review.