Nvidia loses second spot to Microsoft as shares plunge over 6% amid CEO's affair scandal

Microsoft has overtaken Nvidia as the world's second-most valuable company on Tuesday (November 10). This comes after the chip giant's shares fell on uncertainty over the outlook for AI, along with a probe launched into whether Nvidia CEO Jensen Huang was the target of a foreign intelligence effort. On Tuesday, shares of Microsoft fell by 0.4 per cent to $543.25, while Nvidia lost over 6 per cent and was last at nearly $167.11.

Jensen Huang affair with Chinese spy

On Monday, Nvidia tumbled over 8 per cent hours after the company opened an investigation into Chief Executive Officer (CEO) Jensen Huang over an affair with a woman who is suspected of being a spy for China.

The investigation, announced by the company on Sunday, has placed Huang’s future in the spotlight, downgrading Nvidia’s status as the world’s most valuable chipmaker amid the AI boom. Meanwhile, the latest data indicated that the company is valued at $4 trillion.

The probe follows media reports alleging that Huang had a relationship with Alice Huang, a Chinese businesswoman who previously held a senior position at a Singapore-based data centre firm that does business with Nvidia. According to these reports, she allegedly shared information with intelligence officials in Beijing.

Citing US intelligence sources, the reports say officials believe Huang maintained a close relationship with her. China’s Foreign Ministry, however, pushed back on Monday, dismissing the spying allegations as a smear campaign against Beijing.

Meanwhile, a new report has emerged that the alleged Chinese spy Alice Huang, with whom the Nvidia CEO had an affair, facilitated the shipment of at least $7.5 billion worth of the company's chips to Chinese firms. The report appeared in The Information, and it cited two people who know Alice Huang. It also claimed that Alice, along with her husband and sister, built a network of companies across China and Singapore to acquire Nvidia chips.