Nvidia has appointed a leading U.S. law firm to conduct a “thorough and independent” investigation into the relationship between its chief executive, Jensen Huang, and an alleged Chinese spy.
The $4.1 trillion chipmaker’s board has hired New York‑based Wachtell, Lipton, Rosen & Katz for the investigation, which will be led by the firm’s partner Joon Kim. Kim, a former federal prosecutor in New York, is described as a specialist in internal investigations, white‑collar criminal and regulatory defence, and crisis management.
Nvidia has not provided a timeframe for the inquiry, but the company affirmed that Huang will continue to lead the business he co‑founded “without interruption.” A committee of independent board directors, assisted by Kim and Wachtell, will supervise the investigation.
The company is grappling with an espionage scandal after reports that its chief executive was having an affair with an alleged Chinese spy, Alice Huang, who also served as an Nvidia customer.
U.S. ambassador to China David Perdue said: “The situation with Nvidia is another reminder that we have to stay diligent.”
“National security is part of this economic conversation because economic security is national security. And so, what we’re doing with China is bumpy right now,” Perdue told Bloomberg Television.
Nvidia initially denied an improper relationship with the Chinese citizen, who is not related to the Nvidia boss, but Huang later admitted on Sunday that he had been unfaithful to his wife without directly naming Ms Huang.
On the same day Nvidia announced an investigation into reports that Huang “has been the target of a foreign intelligence effort.”
Shares in Nvidia recovered on Wednesday, closing up 2.9% to $173.73 to narrow the market‑cap loss since Friday, which had been reduced to $311 billion after Huang’s admission of marital infidelity.
AI stocks also rose on strong revenue growth from CoreWeave, which more than doubled after reporting robust profits.
Wachtell is one of the most prestigious corporate law firms in the United States. Its founding partner, Martin Lipton, invented the “poison pill defence” in the 1980s, a strategy that allows companies to ward off hostile takeovers.
Technically known as the “shareholder rights plan,” the poison pill enables investors to purchase additional shares at a discount if a single shareholder acquires a specific percentage of the company’s stock, making it harder for corporate raiders to acquire a company without board approval.
The firm has a deep history of high‑profile engagements, including its involvement in the takeover of Getty Oil by Texaco—the largest corporate acquisition at the time—and its advisory role for the U.S. Treasury department during the 2008 financial crisis when it advised on the Fannie Mae and Freddie Mac bailout.
Founded in the 1960s, Wachtell is said to be the most profitable law firm in the United States, with revenues of $5.1 million per lawyer and record profits of $12 million per partner, according to the Am Law 100 rankings.
From 2017 to 2018, Kim served as the acting United States attorney for the southern district of New York, where he led investigations into securities and commodities fraud, mail and wire fraud, public and private corruption, money laundering, cybercrime, and tax offences.
That included the case of former U.S. representative Anthony Weiner, who was sentenced to 21 months in prison for sending obscene material to a minor.
He also oversaw the prosecution of Mehmet Hakan Atilla, a banker convicted in 2017 for helping evade U.S. sanctions on Iran.
Another major assignment landed on Kim’s desk in 2021 when he investigated allegations of sexual harassment involving then‑New York governor Andrew Cuomo.
One analyst has estimated a 15% probability that Huang might be removed as CEO of Nvidia, though there is an 85% likelihood that he will remain in his role once the board investigation concludes.
“Right now the market and investor commentary assign roughly a 15% chance he is removed as CEO of Nvidia, with a high probability (85%) that he stays on as CEO after the board investigation is completed,” wrote technology analyst Dan Ives in a note to investors. “We would expect a board investigation that could last four to six weeks and will create a clear overhang on the stock until additional news emerges from Nvidia.”
Jeffrey Sonnenfeld, senior associate dean for leadership studies at Yale School of Management and founder of the Chief Executive Leadership Institute, placed Huang’s survival chances at “about 50‑50.”