An apparent honeytrap scandal involving the boss of the world’s most valuable company and a suspected Chinese spy is rocking the AI sector. Overnight, Nvidia announced it is launching an independent investigation amid reports that founder and CEO Jensen Huang has been the target of “a foreign intelligence effort”.
That effort, reports claim, led to Huang into a romantic relationship with a Chinese woman, Alice Huang, who was recruited to spy for China’s Ministry of State Security intelligence agency.
Last night, Jensen Huang admitted having an affair, telling Nvidia staff: “I owe my family and all of you an apology. I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.”
The issue goes much further than simply a CEO’s conduct. It falls squarely within US concerns it could lose the AI race to China. Alice Huang worked for a Singapore-based datacentre firm called Megaspeed, suspected of routing Nvidia chips to China and evading export controls.
Jensen Huang has been a critic of those restrictions, arguing in May 2025 that US export controls designed to limit China’s access to AI chips were a “a failure”, and had simply encouraged China to develop its own alternatives.
The revelation comes just a few days after shares in AI-linked companies tumbled, before a late recovery on Wall Street on Friday. Today, Asia-Pacific markets are staging a recovery – Japan’s Nikkei has jumped by 2.2%, while Taiwan’s TAIEX has surged almost 5%. South Korea’s Kospi is missing out, though, down by 0.6%.
Nvidia’s investigation introduces more uncertainty for semiconductor stocks and the broader AI investment ecosystem, says Naeem Aslam, CIO of Zaye Capital Markets: “European tech manufacturers and semiconductor equipment suppliers remain particularly exposed to developments in American AI spending, meaning any renewed selling pressure on Wall Street could quickly spread across European equity markets.”
Bloomberg say the scandal is a “humbling moment” for Huang, calling him one of Silicon Valley’s biggest celebrities in recent years. Bill Ackman, CEO of investment firm Pershing Square, is hoping that Jensen Huang’s dalliance is merely a ‘simple affair’, not a national security threat. While Donald Trump told reporters: “I have not spoken to him about it. I just know he’s a fine person, but you never know what is going on. I hope everything’s fine ... I think he’s an honourable guy.“
A Chinese state-run newspaper has denied Beijing had any link to Nvidia CEO Jensen Huang’s extramarital affair. The Global Times, a nationalist tabloid, said American outlets, in particular the New York Times, were “going crazy” with speculative stories.
Today’s key events
• 7am GMT: German trade data
• Afternoon: Eurogroup meeting of eurozone finance ministers
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