NvidiaThe precedentsThe state: Washington and Beijing
-$192bnGone in one session
Part I · The market
The Most Expensive Affair in Market History
A textbook fall in percentage terms. A record in dollars.
By Mihail Gaydarov
On Sunday night, Jensen Huang, one of the most prominent figures in the area of business and one of the facilitators of the AI industry, told Nvidia staff that he had been unfaithful to his wife. By Monday’s close the stock had recorded a fall of 4.3%, equating to $192bn of value gone.[1] To put that in perspective, the loss was nearly 2x the whole market value of HP when it forced its CEO, Mark Hurd, out in 2010.[2]
Figure 1
One day at Nvidia against whole companies
Nvidia’s loss on Monday 9 November 2026, set beside the entire market value of other companies on the eve of their own CEO scandals. The green line marks $192bn.
NvidiaValue lost in one day, 2026
$192bn
HPWhole company, 2010
$108bn
McDonald’sWhole company, 2019
$149bn
NestleWhole company, 2025
$243bn
IntelWhole company, 2018
$249bn
Sources: Yahoo Finance; 24/7 Wall St.; Associated Press. Hover or tap a row for detail.
When we look at percentages, the market followed the regular script. The standard academic study of 325 executive scandals puts the average company stock loss at 4.1% when the CEO is the alleged offender.[3] For instance, another corporate scandal, involving the CEO of Intel, Brian Krzanich, recorded a loss of about 2% for Intel’s stock.[4] Following the exact same chain for other examples, companies like McDonald’s with Steve Easterbrook and Nestle with Laurent Freixe showed about the same in losses, with slightly more for McDonald’s and slightly less for Nestle. With Amazon that wasn’t exactly the case, because when Jeff Bezos’s affair with Lauren Sanchez surfaced in 2019, Amazon barely moved.[5]
Figure 2
The market followed the script
Share price change on the first trading day after each scandal became public.
HPMark Hurd, 2010
-8.0%
NvidiaJensen Huang, 2026
-4.3%
Study average325 executive cases
-4.1%
McDonald’sSteve Easterbrook, 2019
-2.7%
IntelBrian Krzanich, 2018
-2.4%
NestleLaurent Freixe, 2025
-0.7%
AmazonJeff Bezos, 2019
+0.2%
Sources: Yahoo Finance daily closing prices; Cline, Walkling and Yore, Journal of Financial Economics (2018). Kohl’s is left out here because its shares rose on the day; see Figure 3.
And Bezos in this case is pretty similar to Huang - a CEO who is simply irreplaceable. Like Nvidia’s CEO, he was the founder that nobody could replace, therefore the board and shareholders had no option but to let him stay. But his extramarital affair with Sanchez had nothing to do with Amazon’s business. Huang’s affair is a potentially direct threat to national security, in case the allegations of Chinese espionage made against Huang Le turn out to be true. In terms of what we have as information, US intelligence reportedly believes that Alice Huang, or Huang Le, was recruited by China’s Ministry of State Security and deployed towards Jensen Huang to gather information about him and to influence his stance on selling Nvidia’s advanced AI chips to China.[6]
Nvidia · 2026 · Verdict pending
Jensen Huang and Alice Huang
The chief executive of Nvidia with the former Megaspeed executive whom US intelligence reportedly believes was working for Beijing. He has admitted an affair without naming her; she has not been charged.
Furthermore, Alice Huang was involved in a Singaporean company by the name of Megaspeed, which she helped run and which bought more than $4.8bn of Nvidia chips in two years.[6] Reports suggest that the company also rented the computing capacity to Alibaba.[7] The nearest such precedent was with Kohl’s, which fired its CEO last year for steering business to a partner[8], but where Huang’s case differs is that there was no corporate espionage involved at Kohl’s.
Figure 3
What the exit did to each share price
Share price indexed to 100 at the last close before the news, from 10 trading days before to 40 after, with the change in market value in dollars. The gold line is the news. Each line also carries everything else that happened to the company.
The affair touched the business. All five lost the job.
HP
Mark Hurd · Forced out, 6 August 2010
-12.2%-$13.2bn40 trading days on
Day one -$8.6bnAfter 40 days -$13.2bnWorth before $108bn
Lowest point: down 17.9% after 15 trading days.
Intel
Brian Krzanich · Resigned, 21 June 2018
-11.8%-$29.3bn40 trading days on
Day one -$5.9bnAfter 40 days -$29.3bnWorth before $249bn
The second drop, on 27 July, followed quarterly results.
McDonald’s
Steve Easterbrook · Fired, 3 November 2019
+1.9%+$2.8bn40 trading days on
Day one -$4.1bnAfter 40 days +$2.8bnWorth before $149bn
The loss was recovered within three trading days.
Nestle
Laurent Freixe · Fired, 1 September 2025
+5.8%+$14.2bn40 trading days on
Day one -$1.8bnAfter 40 days +$14.2bnWorth before $243bn
The jump on 16 October followed the new chief executive’s first results and a plan to cut 16,000 jobs.
Kohl’s
Ashley Buchanan · Fired, 1 May 2025
+26.0%+$195m40 trading days on
Day one +$57mAfter 40 days +$195mWorth before $750m
The shares rose on the day: a first-quarter outlook that beat expectations came in the same statement.
3 of 5
Forty trading days on, three of the five traded above their price before the news. The two that did not were HP and Intel, which between them were about $43bn lighter.
It did not. He stayed.
Amazon
Jeff Bezos · Affair public, 9 January 2019. Stayed.
-1.8%-$15.0bn40 trading days on
Day one +$1.4bnAfter 40 days -$15.0bnWorth before $810bn
No visible reaction on the day.
Verdict pending. Two days of trading so far.
Nvidia
Jensen Huang · Affair admitted, 8 November 2026
-9.5%-$428bn2 trading days on
Day one -$192bnAfter 2 days -$428bnWorth before $4.50tn
Two trading days in. The board’s verdict is still to come.
Sources: Yahoo Finance daily closing prices; market values before each event from the Associated Press, Yahoo Finance and 24/7 Wall St.; Kohl’s and Amazon values are The Financier Review estimates. Dollar changes are the percentage move applied to that value. Hover or drag across a chart to read any day.
Now onto the market: it is currently pricing two factors. One is the so-called key-man risk. In case Jensen Huang gets fired from Nvidia, the market is concerned with the future of the AI giant. For example, HP’s then CEO, Mark Hurd, made an exit which cost HP 8% in stock value in a day and $15bn in a fortnight.[9] Further, HP’s stock had still not recovered months later, and similarly Nvidia has no second man to inherit the chief’s seat at the AI giant. Huang also has no dual-class shield, and Yale governance expert Jeffrey Sonnenfeld is on the fence about his survival and gives him a 50-50 chance.[10] But as usual, funds have already voted on the matter: AMD stock rose 13% on Monday the 9th of November, while Nvidia’s fell.[11]
Figure 4
The funds have already voted
Share price change on Monday 9 November 2026. The money left Nvidia and stayed inside the chip sector.
NvidiaThe scandal
-4.3%
AMDClosest rival
+13%
BroadcomCustom AI chips
+8%
ASMLChip equipment
+6%
IntelUS chipmaker
+5%
TSMCMakes Nvidia’s chips
nearly +4%
Sources: Yahoo Finance; CNBC. Closing moves, 9 November 2026.
The other factor being priced right now is policy. Jensen Huang was Washington’s biggest and loudest opponent of chip bans on China. The Democrats, who won both chambers of Congress last week, with a sweeping victory, are now backing export restrictions in America’s defense bill.[12] Republicans, on the other hand, are desperately trying to cling to power and are threatening to subpoena Huang himself.[13] What this means for Nvidia is that a separate bill, which has already cleared the House, would, if it passes, ban Chinese firms from renting Nvidia servers abroad, which is exactly what Megaspeed is accused of enabling.[14]
As for what Beijing has to say: they deny everything. The foreign ministry called the claim a smear, and state media calls this story a witch hunt and a timed sabotage of Trump and Xi’s meeting next week.[15] As you can imagine, Megaspeed has denied diverting chips and nobody has been charged yet.[16]
So what do we have left standing from the facts? The affair is priced in by the financial market; the board’s verdict, expected in four to six weeks, is not.[17] If they decide to clear him, this is the story of Jeff Bezos again; remove him and we get Mark Hurd’s situation at 40x the size.
Figure 5
What is priced, and what is not
Nvidia’s share price since 20 October, and the dates the market still has to get through. The right side is empty on purpose.
Nvidia
Daily close, 20 October to 10 November 2026
-21.6%-$1.12tnsince the eve of the first report
1
29 OctoberThe New York Times reports the suspected spy link. Next day: -4.2%.
2
3 to 5 NovemberDemocrats win Congress and three House chairs ask Huang for a briefing. 5 November: -9.3%.
3
8 NovemberHuang admits the affair and the board opens an investigation. Monday: -4.3%, or $192bn.
4
10 NovemberShareholders sue and a subpoena is threatened. Tuesday: -5.5%.
5
16 to 18 NovemberTrump and Xi meet at APEC. Nvidia reports earnings on the 17th. The House wants its briefing on the 18th.
6
Mid to late DecemberThe board’s verdict, if the investigation takes the expected four to six weeks.
Sources: Yahoo Finance daily closing prices; 24/7 Wall St. for the share count; CNBC; Bloomberg; Associated Press. The fall since 28 October includes a wider sell-off in chip stocks after the midterms, so not all of it is the scandal. The right side of the chart is not to scale.
§
Part II · The law
What We Know About the Nvidia Controversy and Its Potential Legal Consequences
Being targeted by espionage is one thing. Taking part in it is another.
By Boris Atanasov
Nvidia has become one of the most influential companies when it comes down to artificial intelligence; it is a semiconductor supplier to some of the world’s most advanced AI systems.
However, the recent reports concerning Huang’s alleged relationship with a businessperson with suspected connections to Chinese intelligence have put the company on the radar. Apparently, Nvidia’s board has initiated an independent investigation. At the same time, shareholders have brought legal proceedings alleging that information about the alleged relationship and its potential risks was hidden from them or withheld from them.[18]
It is important to note that the allegations remain unproven and no criminal conviction has been established against Huang. Therefore, we cannot talk about what the legal consequences will be for him, but rather underline potential legal outcomes, potential obstacles, and facts established after the investigation is finished.
With the information presented to us, we can analyze a few important questions from a legal perspective that may arise once all the evidence is present and the facts are established.
Figure 6
Five routes, five different tests
The legal questions this part works through, from criminal law down to the boardroom. Each asks for something different, and none has been established.
The law
What must be shown
What follows
Criminal
Espionage Act
18 U.S.C. §§ 793-794
That national defense information was intentionally and deliberately transferred to a foreign government.
For Huang personally, consequences that could be severe.
Criminal
Economic Espionage Act of 1996
18 U.S.C. §§ 1831-1832
Trade-secret misappropriation, including conduct intended to benefit a foreign government.
Penalties under the Act.
Criminal and corporate
Export Control Reform Act of 2018
50 U.S.C. § 4819 and the Export Administration Regulations
That Nvidia’s products reached unauthorized Chinese recipients. For Huang, knowing participation in the transactions.
Financial penalties for Nvidia. For an individual, up to 20 years in prison.
Civil
Securities Exchange Act, Section 10(b)
15 U.S.C. § 78j(b) and Rule 10b-5
A materially misleading statement, the required mental state, and a link between the conduct and investors’ losses.
Compensation, which a fall in the share price does not guarantee.
Corporate
Nvidia’s own governance
The board of directors
That the relationship influenced commercial decisions or compromised Nvidia’s interests.
Removal as chief executive, with no conviction needed.
Source: the analysis in Part II, summarised by The Financier Review. Statutes and cases as cited in the notes.
II.1Personal Controversy or Criminal Investigation
The main controversy is the possibility that Huang is being targeted by a foreign intelligence operation; in this case, the country we are talking about is China. I will put an emphasis on the word “targeted” - there is a big distinction between being targeted by espionage and participating in some form in it. American law is clear when it comes to pedantically examining an individual’s connection to economic misconduct, corruption, and espionage (see article “The Magnitsky Law”).
If Huang is found to have only maintained a personal relationship with the individual suspected of foreign intelligence activities, this won’t constitute a criminal offence, simple as that. Therefore, prosecutors would need to establish that Huang knew about the alleged connections of the Chinese businesswoman Alice Huang and engaged in conduct prohibited by federal law. The Espionage Act, 18 U.S.C., Sections 793-794, outlines and criminalizes certain unauthorized activities, for instance, misconduct involving national defense information.[19] If protected information was intentionally and deliberately transferred to a foreign government under circumstances satisfying the statute, the consequences could be severe.
However, not all types of information can be qualified as national defense information; confidential data of Nvidia may fall under another type of legislation, trade-secret legislation. Another law relevant to the matter is the Economic Espionage Act of 1996. It provides penalties for certain forms of trade-secret misappropriation, including conduct intended to benefit foreign governments.[20] For Huang, the evidence is important. If information that satisfies the requirements under the Espionage Act was transferred to a foreign government, he may be held responsible. Obviously, everything depends on the evidence. Furthermore, one thing should be clear - being deceived by an intelligence operative is not equivalent to knowingly assisting one.
II.2What Happens with Nvidia’s Semiconductor Exports?
Having mentioned all the allegations surrounding Huang’s personal conduct, let’s see what will happen with the international distribution of Nvidia’s semiconductors. The United States, especially in the last few years, has established legal reforms when it comes to the export of advanced artificial intelligence technology.
Under the Export Control Reform Act of 2018 and the Export Administration Regulations, specific semiconductor transactions require government authorization.[21] If investigators were to establish that Nvidia’s products reached unauthorized Chinese subjects, the legal consequences could be huge, and the most realistic one would be to challenge the whole company in a federal court. Yet, analogically, as I mentioned in the previous point, the discovery of an unlawful shipment most definitely would not make Nvidia’s CEO criminally responsible. The prosecutors handling the case will have to find clear evidence to support the argument that Huang’s company is exporting its production to unauthorized Chinese recipients.
If found responsible in this matter, Nvidia can face significant financial penalties because of corporate violations, while for Huang personally, the consequences can become serious. If evidence is demonstrated of knowing participation in unlawful transactions, Huang can face up to 20 years of imprisonment.[22]
50 U.S.C. § 4819Penalties
“(2) in the case of the individual, shall be imprisoned for not more than 20 years, or both.”* - Look at the endnote.
Because Nvidia is part of a global supply chain and has access to foreign markets, the company can face greater financial penalties.
II.3Could Shareholders Hold Huang Responsible?
Investors have reportedly accused Nvidia and Huang of failing to disclose information that is relevant to the company’s exposure to national security risks[18]. The main problem is whether the information allegedly withheld was important enough to influence an investor’s decision.
Under American law, this is known as materiality. The United States Supreme Court established something very interesting - information is considered material when a potential investor considers it important in making an investment decision.[23]
Of course, that does not mean that corporate executives must show every aspect of their personal lives; an extramarital relationship does not necessarily mean a matter of securities regulation. Only if personal relationships create a commercial conflict or national security concern may the situation become legally relevant. Section 10(b) of the Securities Exchange Act of 1934 prohibits specified misleading conduct in connection with securities transactions.[24]
17 C.F.R. § 240.10b-5Employment of manipulative and deceptive devices
“It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.”
Additionally, showing that a controversy affected the company’s share price is not enough. It is also necessary for investors to prove the required elements of securities fraud:
aA materially misleading statement.
bThe required mental state.
cThe nexus between the alleged misconduct and their financial losses.
As the Supreme Court clarified through its practice, a decline in market value does not mean guaranteed recoverable damages. Therefore, even Nvidia’s market downfall would not necessarily mean compensation for shareholders.
II.4One Final Conclusion: Can Jensen Huang Lose Control of Nvidia?
With the case of Nvidia happening at this moment, we can conclude one thing - there is a growing interaction between private corporate activity and national security.
The most important question is whether Huang can lose control and the authority to manage the company. Huang founded the company and is undeniably closely associated with its success, but his executive position is subject to the company’s governance structure. If the investigations establish that the personal relationship influenced commercial decisions or compromised Nvidia’s interests, there is a high possibility that he could lose control and responsibilities. The board would need to examine whether the conduct affected the corporation and whether governance regulations were violated.
The answer is simple - yes, Huang could potentially be removed as CEO without being convicted of any crime. Whether he will be found guilty of participating in misconduct benefiting a foreign government, we are about to find out.
StaysGoes
Part III · Opinion
Can Jensen Huang Survive His Self-Sabotage?
The scale tips his way, but not by as much as Wall Street thinks.
By Mihail Gaydarov
As a disclaimer, this section is entirely opinion, based on reasonable deductions from industry experts, and contains no certain predictions. Having explored many similar situations, our guess would be that in the short run he would be able to survive. Nvidia’s board, which launched the internal investigation, has already said it sees no sign that security or proprietary information was compromised and, by implication, it simply has nobody to replace the legendary Jensen Huang with.[16] Nvidia’s CFO, Colette Kress, is viewed as an interim option at the very best.[25] Also, it is important to note here that Jensen Huang is the largest individual shareholder in the company, at about 3.5% ownership of Nvidia.[26] Further, President Donald J. Trump has publicly told the press that he is on Huang’s side.[13] So it would be safe to assume that the board won’t fire a founder into a vacuum while $4.5tn in valuation rests on him.
But the precedents argue the other way around. Every CEO whose private affair even remotely affected the business lost his job. In our case that would be Hurd, Krzanich, Easterbrook, Freixe and Buchanan. What we believe is that Bezos survived the scrutiny because his affair was purely personal. Huang’s partner was linked to a customer that spent more than $4.8bn with his company, which puts him in the first group.
HP · 2010 · Forced out
Mark Hurd
Chief executive of HP. Gone within weeks of a contractor’s complaint. The shares fell 8% in a day and were 12% lower forty trading days on.
Nestle · 2025 · Fired
Laurent Freixe
Chief executive of Nestle. Dismissed over an undisclosed relationship with a direct subordinate, after first denying it to his board.
What finishes the CEO isn’t the affair itself but the cover story - more than anything. Laurent Freixe, Nestle’s ex-CEO, was fired after at first denying the relationship to his board.[27] McDonald’s clawed back Easterbrook’s pay because he had lied.[28] Just last month Jensen Huang described his dealings with Alice Huang as normal Megaspeed business.[29] Then, two weeks later, he admitted to being unfaithful to his wife - the exact conditions on which shareholder class actions are built.[30]
In my role as Chief Financial Analyst, I put the chance of him still being Nvidia's CEO in a year at 60%, significantly below Wall Street’s 85% figure.[1] Truthfully, the most likely scenario is that we see a diminished Huang. What we believe will happen is that he will be cleared of leaking anything, kept in his position, but with a named successor beside him. Compliance will be taken out of his hands and his role as Nvidia’s voice on China will be finished. Even if the board spares him, Washington will be the harder test, with Democrats set to control both chambers of Congress from January.[14]
Figure 7
Three estimates of the same chair
The chance that Jensen Huang keeps his job, as judged by three observers. The needle that matters to this article is the green one.
60%The Financier Review
Jeffrey SonnenfeldYale School of Management
Stays 50%
Goes 50%
The Financier ReviewStill chief executive in a year
Stays 60%
Goes 40%
Wall StreetAs estimated by Dan Ives
Stays 85%
15%
The gap between this article and the Street is 25 points.
Sources: 24/7 Wall St.; Yahoo Finance; The Financier Review. The 60% figure is the author’s own judgement.
Lastly, we have identified three things that might flip the situation:
Three tripwires
Any one of them ends it.
1
Evidence that information has actually reached Beijing.
Unlikely, the reason being that it is difficult to prove and would imply that the US has been undermining itself in the AI race.
Unlikely
UnlikelyLikely
2
Proof that he knew Megaspeed’s chips were going to China.
Relatively unlikely, again difficult to prove.
Relatively unlikely
UnlikelyLikely
3
A finding that he misled his own board.
Likely: if evidence exists, board members will probably not hide it, considering the magnitude of the conflict.
Likely
UnlikelyLikely
In the end, any of these would turn the situation into Mark Hurd’s exit.
Notes on the Record
30 sources, numbered as they appear
AllPart IPart IIPart III
1
24/7 Wall St., 10 November 2026. Monday close of $178.67, about $192bn of market value lost, and analyst Dan Ives on an 85% chance that Huang stays.
Yahoo Finance, daily closing prices for HPQ, INTC, MCD, NESN.SW, KSS, AMZN and NVDA. Percentage and dollar moves are The Financier Review calculations.
Al Jazeera, “Why is Nvidia’s Jensen Huang at the centre of a US-China spy scandal?”, 9 November 2026. The board’s statement and the absence of charges.
18 U.S.C. §§ 793-794, Gathering, Transmitting or Losing Defense Information; Gathering or Delivering Defense Information to Aid Foreign Government; and 50 U.S.C. § 421, the Intelligence Identities Protection Act.
Bloomberg via Business Standard, “Geopolitics takes Nvidia CEO Jensen Huang’s affair scandal to a new level”, 10 November 2026. The McDonald’s clawback.
Special report. Market figures are as of the close on Tuesday 10 November 2026 unless a figure says otherwise. This article is analysis and opinion. It is not investment advice and it is not legal advice. The allegations it discusses are unproven.
Written by
Mihail Gaydarov
Founder, Managing Partner and Chief Financial Analyst
