CNN: Jensen Huang is embroiled in a spy relationship and corporate governance scandal; if forced to resign, Nvidia's market value could evaporate by $1 trillion.

BlockBeats news, November 12 - According to CNN, NVIDIA CEO Jensen Huang is embroiled in a corporate governance crisis due to allegations of an extramarital affair with a woman identified by U.S. intelligence as a Chinese spy, as well as affairs with subordinates. NVIDIA's board has hired prominent Wall Street law firm Wachtell, Lipton, Rosen & Katz to conduct an independent investigation, focusing on whether Huang concealed relevant relationships from the board, whether there were conflicts of interest, and whether the company misled investors in responding to media reports.

The report states that a classified memo issued by U.S. intelligence in May of this year identified Alice Huang, a former executive at Singapore-based NVIDIA client Megaspeed, as a Chinese intelligence officer. Megaspeed is also under federal investigation for allegedly transshipping advanced U.S. chips to China in violation of export control regulations. Huang has acknowledged the extramarital affair, but NVIDIA said there is currently no reason to believe that national security or NVIDIA trade secrets have been compromised.

Former U.S. SEC Chairman Gary Gensler said that if the investigation finds that Huang deliberately misled the board, he could face removal from his position. NVIDIA previously claimed that Huang's interactions with Alice Huang were normal customer communications, but this statement conflicts with the subsequent admission of the extramarital affair.

In addition, shareholders have filed lawsuits accusing NVIDIA and Huang of misleading investors in responding to related media reports. The report states that NVIDIA's stock price previously fell 9% in a single day. Yorkville Ives & Co. analyst Dan Ives estimates that if Huang is forced to resign, NVIDIA's market value could lose $1 trillion.