Nvidia’s stock sank 5.47% on Tuesday, on top of a 4.3% drop on Monday, as the Jensen Huang Nvidia crisis deepened. In two days, the world’s most valuable chip company lost about 9.5% of its value — and there wasn’t much news out of the company to explain it.
The affair at the centre of it is admitted. The investigation is open. The board has hired Wachtell, Lipton, Rosen & Katz to conduct an internal investigation. And yet the question that will decide what happens next has not been answered.
The question is simple: what did Jensen Huang know about Alice Huang, and when did he know it?
The Jensen Huang Nvidia crisis: two scenarios, two very different endings
Huang has admitted to an extramarital affair with Alice Huang, a former executive at Megaspeed, a Singapore-based data-centre company and major Nvidia customer. U.S. intelligence agencies believe Alice Huang — also known as Huang Le, a Chinese citizen and former television reporter in China — was spying for China. The New York Times has reported that a classified memo alleges China’s Ministry of State Security recruited her to gather intelligence on Huang and to nudge Nvidia to lobby for China to receive its most advanced chips. China calls the espionage claims groundless.
On Sunday, Huang emailed Nvidia’s employees. “I was unfaithful to my wife,” he wrote. “My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.” He did not name Alice Huang. In the same message, he noted that Nvidia’s board had initiated an independent investigation into the national security concerns raised in news reports.
The board, for its part, said it has “no reason to believe that either national security or NVIDIA secrets were compromised” — and then hired Wachtell, Lipton, Rosen & Katz to find out whether that is true.
This is where the two scenarios described by Todd Henderson, a governance professor at the University of Chicago, come in. In one, Huang hired a crisis PR firm because an affair is embarrassing, without knowing who the woman was. In the other, he knew she was a suspected spy — and did not tell his board.
“I think that’s very different,” Henderson said. And if it is the second scenario, he added, the consequences change entirely. Not telling the board “that you’ve been sleeping with a Chinese spy,” he said, “seems to me to be a fireable offense.”
There is no reporting that Huang acted with knowledge that Alice Huang was a Chinese agent. That absence is precisely what makes the question so combustible: everything turns on facts that are not yet public.
The PR firm hired a year ago
The one fact that keeps pulling the timeline backwards is the PR firm.
According to Wired, Huang hired Heller Inc., a crisis communications firm known for handling sex scandals, at least a year before he publicly acknowledged the affair. Heller Inc. founder Risa Heller has advised prominent men through personal scandals and sexual misconduct accusations, according to a 2023 New York Magazine profile; her reported clients include former congressman Anthony Weiner, celebrity chef Mario Batali, and former New Yorker writer Jeffrey Toobin.
Wired also reported that Nvidia’s internal communications team was told to copy Heller Inc. on press inquiries about Huang shortly after an October 2025 New York Times report about whether Nvidia was helping Chinese companies evade U.S. chip export restrictions. The Times reported that Megaspeed had acquired nearly $2 billion worth of Nvidia chips.
None of this proves what Huang knew — a CEO of his profile hires crisis PR for an affair alone. But it is the hinge of the whole story: if the firm was engaged only for the affair, the episode is a personal failing with corporate embarrassment attached. If the engagement came after Huang learned who Alice Huang was, the board has a very different problem — one that Ann Lipton, a governance professor at the University of Colorado, frames as three lines of inquiry: whether the law was broken, whether Huang violated Nvidia’s internal policies, and whether the board was misled, including how forthcoming he was and when he was on notice.
The board’s impossible position
The professors who study how boards handle crises agree on one thing: there is no real precedent for this one. “There have actually been affair cases and sexual harassment cases,” Lipton said, “but I don’t know of previous cases that also involve potential national security compromises.”
That leaves the board improvising in public. The investigation is led by Nvidia’s independent board members, with their own outside counsel. Lipton observed that an investigation will be “exactly as thorough” as the directors running it want it to be. Henderson made a related point about incentives: the Washington law firms that conduct internal investigations know who pays their bills.
Nvidia’s 10-member board has a track record of loyalty and deference to Huang, as outlined by the New York Times. The independent-directors investigation, though, makes it harder for a derivative plaintiff to show the board cannot handle the matter.
The lawsuit will not be about the affair
Lipton expects shareholder suits, and she said two kinds are possible. Securities fraud, which she said is “only about lying,” is the most obvious. Nvidia is already facing a proposed class action, filed by Rosen Law Firm, that alleges Nvidia and Huang misled investors by concealing Huang’s relationship with Alice Huang while describing dealings with her former employer as routine.
“You can have as many affairs with Chinese spies as you like,” Lipton said. “You just can’t lie about it under the federal securities laws.”
A derivative suit — brought on the company’s behalf — must first show the board is incapable of handling the problem. Lipton cited a McDonald’s shareholder suit, where the court found no reason the board couldn’t deal with the misconduct on its own. The Wachtell investigation makes the same argument available to Nvidia’s board.
A company built around one man
Even if none of this threatens Huang’s job, the episode raises governance questions that don’t look great in retrospect. Nvidia is run with a famously flat structure, with more than 60 direct reports to Huang, and the company doesn’t appear to have a succession plan — which Lipton called “a danger for any company.”
Huang’s children also work at Nvidia: his son Spencer is a director of product management, his daughter Madison a senior director of product marketing, and his son-in-law Nico Caprez works in business development. Lipton called hiring the kids poor corporate hygiene. Henderson said the idea that one of Huang’s children would succeed him at a publicly traded company the size of Nvidia “seems crazy.”
What Nvidia may have gotten more right, from a governance standpoint, is what it doesn’t have: dual-class shares. Huang owns about 3.6% of the company, so he doesn’t control the vote. That makes him “easier to dislodge,” Lipton said, even though he is deeply integrated into the company in other ways. With voting control on top of Huang’s holdings, the board would have even less flexibility. Without it, the board has a few more options.
What happens now
The Commerce Department has initiated investigations into Megaspeed. Donald Trump has said the FBI is looking into the matter. Three House committee chairs have asked Huang for a closed-door briefing on 18 November. Huang remains chief executive during the probe, and the board says he “fully supports the review and has committed to co-operating with it.”
All of it, though, circles back to the same unanswered question. When did Huang learn that Alice Huang was a suspected spy? What did he tell the board, and when? And what, if anything, did she obtain — chip designs, fab secrets, or only ordinary corporate information?
The affair itself is not what will decide Jensen Huang’s fate. The timeline will.
