Nvidia shares slide about 5% before the open as Trump defends Huang and a report says Rubio oversaw a secret memo

Nvidia shares were down around 5% in premarket trading on Monday after the company was rocked by an investigation into chief executive Jensen Huang’s relationship with an alleged Chinese spy¹. Stock futures and Treasurys were steady while Nvidia slid before the open². Huang apologized on Sunday, and the board opened an independent probe after he admitted to a relationship with a woman named Alice Huang, an alleged Chinese operative¹². The board expressed confidence in his leadership¹².

President Trump defended Huang on Sunday night, even as the board’s investigation got under way³. Asked whether he would take Huang on an Asia trip next week, Trump told reporters: “I don’t know, but I’d certainly take him”³. “I haven’t heard that he’s done anything wrong,” Trump said, adding that Huang “dealt with somebody but, you know, so does everybody else”³.

Secretary of State Marco Rubio oversaw the production of a secret memo on US concerns about the relationship, a newspaper reported on Sunday⁴. The classified memo, prepared in the spring, warned Trump administration officials about Huang’s ties to a Chinese businesswoman, according to accounts of that report^9,10. China has rejected the spying allegation as “a baseless smearing”¹⁵.

Why it matters to investors

Investors have said the affair could put a cloud over the entire AI trade, and multiple members of Congress have called for probes³. Huang has reassured jittery markets with his words and bankrolled a trillion-dollar buildout, and there is no backup plan if he is forced to step down¹². Without dual-class shares to protect him, he faces a board investigation, congressional questioning and a market struggling to imagine the company without him¹³.

Lawyers and analysts say the fallout threatens not only the 63-year-old’s three-decade tenure but also Nvidia’s delicate semiconductor trade with China⁸. The scandal also arrives as large Democratic wins in the midterm elections threaten to slow the US AI infrastructure buildout, a key source of demand for Nvidia’s chips⁶. Ryu Young-ho, a senior analyst at NH Investment & Securities, said it “appears the US government had been aware of the matter involving Jensen Huang”⁷.

What to watch

Huang is perhaps Trump’s closest adviser on AI, which is core to the White House’s economic and national-security strategy, and the affair is testing both the president and an emboldened Congress¹¹. Trump’s backing has not calmed worries over Nvidia’s leadership as the scandal widens⁵.

According to accounts of the newspaper report, the concerns in the memo involved AI chips and pushing Huang to lobby Washington for looser export controls¹⁰. Some commentators have asked whether Trump’s remarks signal that Huang is “too big to fail” for the United States at the moment¹⁴. The next markers are the board’s independent investigation and whether Huang joins the president’s Asia trip next week^3,12.