Nvidia stock falls 4% as chipmaker investigates CEO Jensen Huang’s relationship with suspected Chinese spy

Nvidia (NVDA) stock fell as much as 8% before paring losses Monday after the chipmaker’s board said it would investigate the relationship between CEO Jensen Huang and a woman the intelligence community believes may be a Chinese spy.

In a memo to employees on Sunday, Nvidia CEO Jensen Huang admitted to having an extramarital affair, apologizing to his family and staff while pledging to cooperate fully with an independent review board. Wall Street analysts were quick to point out the “heightened key person risk” for the world’s top AI chip maker.

“Jensen is Nvidia’s core DNA, and his success and ambitions in AI are strongly tied to his continued tenure as CEO. Jensen is not replaceable,” Dan Ives of Yorkville Ives wrote Monday morning.

A review of the semiconductor industry showed that the risk of damage was largely limited to Nvidia. Shares of rival AMD (AMD) rebounded 8% following an upgrade to Buy from analysts at Oppenheimer. Broadcom (AVGO) rose 6%, while Intel (INTC) edged up 2%.

Shares of Taiwan Semiconductor Manufacturing Company (TSM), which makes Nvidia chips, rose nearly 2%, while semiconductor equipment maker ASML (ASML) also gained 3%.

Storage maker SanDisk (SNDK) rose 1%. Memory chip maker Micron Technology (MU) rose more than 1%, while SK Hynix (SKHY) was little changed.

Other chip-related stocks include processor maker Qualcomm (QCOM) and semiconductor designer Arm Holdings (ARM), both moving minimally.

Meanwhile, shares of Alphabet (GOOGL) rose more than 2% in early trading Monday after the tech giant introduced two new tensor processing units, or TPUs. Alphabet has accelerated its local AI chip business, introducing four TPU systems in a single year.