Nvidia shares fell more than 6% on Tuesday after a 4.3% drop on Monday, putting the chipmaker on track to shed more than $470 billion in market value over two sessions, according to Reuters. The decline briefly let Microsoft overtake Nvidia as the world's second-most valuable company, the first time that has happened since June 2025. Apple remains first. Nvidia's stock is now down about 32% over 24 trading sessions, a slide that has erased roughly $1.8 trillion in market value since its early-October record.
The immediate trigger is a report about Chief Executive Jensen Huang's personal life and its alleged connection to Nvidia's China business. But the scale of the selloff reflects a broader problem for the AI trade. Nvidia is the largest pure-play beneficiary of the data-center buildout, and its valuation depends on the belief that demand will keep growing and that the company can keep selling into every market that matters. A governance crisis at the top tests both assumptions at once.
What the report says
The Information reported on Tuesday that Huang's relationship with Alice Huang, a Chinese businesswoman alleged to be a spy for Beijing, helped facilitate shipments of at least $7.5 billion worth of Nvidia chips to Chinese firms. Alice Huang and Jensen Huang are not related. The allegation that she is an intelligence asset has not been proven, and China's foreign ministry has called the spying accusations groundless. The report, which cited two people who know her, said the network moved about 240,000 H100 and H200 chips, plus some A100 chips, into China. Reuters could not independently verify the report.
According to the report, Alice Huang, also known as Huang Le, built a network of companies across China and Singapore with her husband and sister to acquire Nvidia chips. At the center was Shanghai Century Litong, which secured preferred cloud partner status with Nvidia in 2023 and with it priority access to chips. When orders subject to U.S. export restrictions stalled, she used ties to Nvidia and its distributors to secure supplies, the report said. Century Litong rented computing capacity and operated data centers using the chips, including some that were barred from sale to China. Some of the chips ultimately served Alibaba, Tencent, and smaller Chinese AI labs, according to the report.
Alice Huang also held an executive position at Megaspeed, a Singapore-registered company linked to Century Litong that has been investigated by U.S. authorities over Nvidia chip shipments from Southeast Asia to China. The report said she used her relationship with Jensen Huang to bolster her credibility while keeping her role vague and avoiding a paper trail.
The investigation
Nvidia's board launched an internal investigation on Sunday, and the FBI is examining whether Huang, 63, was targeted by a foreign intelligence operation, according to Reuters. Huang has told employees that he was unfaithful to his wife but has not provided details about the relationship. Nvidia did not respond to a Reuters request for comment, but the company has said it has no reason to believe national security or company secrets were compromised and that Huang is cooperating with the review. Alibaba, Tencent, Megaspeed, and Shanghai Century Litong were not immediately available for comment.
The board's investigation is the most important near-term development. It puts the company's own lawyers and directors in the position of examining whether a personal relationship affected commercial decisions, export compliance, or the company's controls. The scope of that review, and whether it is limited to the relationship or extends to the China shipments, will determine how much of the market's concern is justified.
The FBI review adds a national-security dimension. Nvidia sells some of the most sensitive technology in the world, and the U.S. government has spent years tightening controls on advanced chips sold to China. If the relationship was used to move restricted chips, the issue becomes more than a corporate ethics story. If the review finds no such link, the market may treat the episode as a reputational problem that fades.
The export-control context is what makes the case unusual. Nvidia has designed lower-performance chips for the China market to stay within U.S. rules, and those rules have changed repeatedly. The report alleges that H100 and H200 chips, which are subject to restrictions, moved through a network that included a preferred cloud partner. If true, that would be a compliance failure with consequences beyond the stock price. Nvidia has said it complies with export controls and is cooperating with its board's review.
The market math
Nvidia's market value is around $4 trillion, and the gap between it and Microsoft is now measured in tens of billions, not hundreds. Microsoft's shares also fell on Tuesday, but less than Nvidia's, which was enough to flip the ranking briefly. Benzinga reported that Nvidia reclaimed the second spot later in the day, recovering some of its losses. The ranking is symbolic, but it matters for index funds, passive flows, and the psychology of a market that has treated Nvidia as the safest way to own AI.
The selloff has been building for weeks. Nvidia's stock is down about 32% over 24 trading days, according to the Economic Times, and the decline has coincided with a broader retreat from AI stocks. SoftBank took a $7 billion loss on its data-center bets this week, and Anthropic priced its IPO below the valuation it once sought. The Nvidia story is the most dramatic expression of a repricing that was already underway.
The company reports earnings on Nov. 17, with analysts forecasting about $108 billion in revenue. That report will give investors a cleaner read on demand than the daily news flow. If Nvidia guides strongly and the board investigation stays contained, the stock could stabilize. If the report raises questions about China revenue or the investigation widens, the selloff could feed on itself.
The index math adds to the pressure. Nvidia is one of the largest weights in the S&P 500 and the Nasdaq, so a decline of this size pulls on every passive fund that owns the market. That mechanical selling can amplify a company-specific story, which is one reason a scandal at Nvidia becomes a market event rather than a single-stock problem.
The governance question
Nvidia has one of the most concentrated leadership structures in big technology. Huang founded the company, runs it, and is the public face of the AI boom. There is no named successor. That structure has been an asset for two decades, because it let Nvidia make large, early bets on accelerated computing and AI. It is a liability when the CEO's personal conduct becomes the story.
The board's response will be watched closely. An internal review that ends quickly and clears the CEO may satisfy investors who want the issue to go away. A review that finds problems, or that expands into export controls, would be harder to contain. The company's relationships with Alibaba, Tencent, and the distributors in its China channel are also at stake. Nvidia has said it complies with export controls. The question is whether the arrangements described in the report were consistent with that claim.
The political reaction is already forming. Senator Kevin Cramer, a North Dakota Republican on the Senate Banking Committee, called on Huang to resign in an interview with Politico late Tuesday, saying the potential for extortion involving sensitive chips was too great. Former Trump economic adviser Larry Kudlow also called for Huang to step down. Calls like that rarely force a CEO out on their own, but they raise the cost of keeping him, especially if more lawmakers join. Nvidia's board has not indicated that it is considering a leadership change.
The debate
Bank of America analysts framed the question well. They asked whether the issue remains company-specific or triggers restrictions and disruption across AI infrastructure. They also cautioned that allegations are not proven business damage. "We would not equate allegations with proven business damage," they wrote. That is the right distinction. The market is not pricing a proven loss of revenue. It is pricing uncertainty about what the investigation will find and what the government will do.
The bull case is that Nvidia's products remain scarce, demand remains strong, and the affair is a personal matter that does not change the company's competitive position. The bear case is that the report has given U.S. regulators a reason to look more closely at Nvidia's China channel, that the CEO's position is now a governance risk, and that the stock's valuation leaves little room for either. Both cases depend on facts that are not yet public.
What to watch
The board investigation is the first thing to watch. Its scope and timing will shape the next month. The FBI review and any action by the Commerce Department are the second. Nvidia's earnings on Nov. 17 are the third. Watch the China revenue line, the guidance for the January quarter, and any commentary on export controls. Watch whether Microsoft and Apple hold their rankings, and whether Nvidia's stock can stabilize before the report.
For the broader AI trade, Nvidia is still the bellwether. Its customers are building data centers at a pace that assumes continued access to its chips, and its suppliers are investing against the same forecast. A company-specific scandal can be absorbed. A national-security investigation that disrupts the China channel cannot. The next few weeks will show which one this is.
Primary sources
- Reuters via The Standard for the two-day market loss, the report's details, the board investigation, the FBI review, and the Bank of America comments.
- Benzinga for Microsoft briefly overtaking Nvidia and the ranking details.
- The Economic Times for the 24-session decline and the $1.8 trillion market-value loss.
- Mavengity's earlier coverage of the AI trade for the SoftBank and Anthropic context.