Nvidia's share price fell sharply for a second straight day. The controversy over CEO Jensen Huang's private life has spread into a security issue over chips and China. The market capitalization wiped out over the two days exceeds $430 billion (about 578 trillion won).
On the New York stock market on the 10th (local time), Nvidia closed at $168.80. That was down 5.53% from a day earlier. Adding the previous session's 4.27% decline, the cumulative two-day drop is 9.56%. Calculated on about 24.1 billion shares outstanding, market capitalization shrank by more than $400 billion in two days.
The market cap ranking also changed. Microsoft (MS) overtook Nvidia. Nvidia became third, behind Apple and MS. It is the first time since June last year that MS's market cap has been larger than Nvidia's.
The woman at the center of the controversy is Alice Huang. She was an executive at Singapore AI cloud company MegaSpeed. U.S. intelligence authorities are reported to have suspected that she may be linked to Chinese intelligence.
U.S. tech outlet The Information raised additional allegations. It said Alice Huang may have been involved, by using her relationship with CEO Huang, in the diversion of Nvidia chips to Chinese companies. The scale was cited as at least $7.5 billion (about 10.08 trillion won). However, it has not been officially confirmed whether the deal directly violated U.S. export control law. It has also not yet been established whether CEO Huang took part in any illegal conduct.
Legal disputes have also begun. Nvidia shareholders filed a class action on the 9th in federal court in San Jose, California. The defendants are Nvidia and CEO Huang. In the complaint, shareholders claimed that "concealing the affair with a person suspected of being a Chinese spy meant failing to disclose a national security risk that could affect the company's reputation and business," and demanded damages.
Politicians also moved. House Democratic Leader Hakeem Jeffries urged Congress to step in and establish the facts. President Donald Trump said the Federal Bureau of Investigation (FBI) is investigating the matter.