Nvidia (NASDAQ:NVDA) stock, arguably the most important share for the AI sector, continued to trade lower in Monday's trade as the markets reacted to news that CEO Jensen Huang is under investigation.
The chipmaker was, on Monday, thrown into the crosshairs of a corporate relations and leadership crisis, with chief executive Jensen Huang now the subject of a company investigation related to an extramarital affair and an alleged espionage attempt targeting the chipmaker boss.
Huang issued a public apology on Monday addressed to his family and the company, acknowledging infidelity that he said hurt his wife and children.
Nvidia, meanwhile, in a separate statement, told investors that it is launching an independent investigation following the reports, which claimed Huang had been targeted by a foreign intelligence effort. The investigation will be overseen by a committee comprising independent directors, working with outside independent counsel, it said.
The company said it has no reason to believe either US national security or Nvidia's trade secrets were compromised, but added that its review will examine all available information. It added that Huang has agreed to cooperate fully with the review.
"The board prioritizes US national and economic security, which is paramount to the interests of NVIDIA and its shareholders," the company said in the announcement.
Moreover, it added that it retains confidence in Huang and his leadership team, and said it intends to provide updates as the investigation progresses.
Full responsibility
In an open letter published by Nvidia, Huang said he took full responsibility for the affair and accepted the criticism that follows, while asking that his family be given privacy.
The apology also addressed unspecified national security concerns raised in news reports, which Huang said have prompted Nvidia's board of directors to open an independent investigation.
"I support the investigation and will cooperate fully", Huang said, adding that he remains committed to protecting Nvidia and supporting American national security.
Huang told colleagues, the board, partners and shareholders that leading Nvidia is "the privilege of my life" and said he had fallen short of his responsibility to serve them.
In New York, after a volatile open, the Nasdaq-listed stock was down $11.09 or 6% to around $175.55 per share, and was moving fast and was volatile.
Traders on Monday will focus not only on Nvidia, but also on the other publicly traded AI-related stocks with beady eyes keenly watching for signs of panic and/or capitulation. The Nvidia crisis comes as Silicon Valley pundits and stock market commentators are pointing to a variety of signals that a so-called AI bubble could be nearing a 'burst'.
