Trump announces FBI espionage investigation into Nvidia CEO Jensen Huang

The Nvidia CEO's relationship continues to draw growing scrutiny. US President Donald Trump announced that the Federal Bureau of Investigation (FBI) is examining Nvidia Chief Executive Officer (CEO) Jensen Huang's relationship with a woman alleged to be an agent of the Chinese government.

Speaking at a White House press conference, Trump said the inquiry was ongoing, but he believed Huang had nothing to worry about.

Trump speaks with Huang

The crisis at Nvidia, designer of advanced chips powering the artificial intelligence (AI) sector, heightened concerns over whether Beijing gained direct access to these technologies. Addressing the counterintelligence investigation directly, Trump stated that he spoke with Huang personally. Trump said, "I spoke with him today to see how he was doing. He said he had absolutely no idea the person involved was an agent."

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Jensen Huang admits relationship and apologizes

In an open letter published on Nvidia's website, Huang confirmed that he had an extramarital affair and apologized to his wife and company employees. The New York Times reported that US intelligence agencies determined the woman in question was gathering information on behalf of Beijing.

In the letter, Huang said, "I support the ongoing investigation and will fully cooperate. I love my country and my company. I am committed to protecting Nvidia and supporting America's national security." The company announced in a statement on Sunday that it had launched an independent internal investigation into allegations that Huang was targeted by a foreign intelligence operation.

Congress demands inquiry, China denies allegations

The incident also prompted reactions in the US Congress. Senior Democratic Senator Mark Warner and House Democratic Leader Hakeem Jeffries stated that they wanted the matter investigated in detail. Jeffries disclosed that the Nvidia issue was raised during a closed-door briefing with the Director of the Central Intelligence Agency (CIA) and the Director of National Intelligence. Jeffries stated that a comprehensive briefing was needed to clarify the national security implications of the incident.

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Trump, who is set to meet Chinese President Xi Jinping next week at the Asia-Pacific Economic Cooperation (APEC) summit in Shenzhen, did not give a definitive answer when asked if he would discuss the matter with Xi. Trump said, "I don't think so. Maybe. I'm sure President Xi will ask me about it. I know Jensen very well, I think he is a highly honorable person."

The Beijing government rejected allegations that an espionage trap was set for Huang. Chinese Foreign Ministry spokesperson Guo Jiakun said, "The so-called Chinese spy allegation is groundless. This is nothing more than a smear against China." Chinese state media outlet Global Times wrote that the reports aimed to disrupt bilateral relations.

Drop in Nvidia's market value

The developments directly impacted the markets. Nvidia shares fell more than 4 percent in trading on Monday. The decline in the company's shares reached approximately 11 percent over the past week.

Huang had been holding talks in Washington for a long time regarding the easing of regulations for the artificial intelligence (AI) sector and loosening chip sales restrictions. In an official filing published in August, Nvidia stated that chip sales to the country remained at a low level due to restrictions imposed by the Chinese government.