Nvidia Board Hires Former U.S. Attorney to Lead Huang Probe as Senator Calls for CEO to Resign

Nvidia’s independent directors have retained former acting U.S. Attorney Joon H. Kim and his law firm, Wachtell, Lipton, Rosen & Katz, to lead the investigation into chief executive Jensen Huang, the board said Tuesday, as pressure on the chipmaker mounted from Congress and Wall Street.

The board said Kim would conduct “a thorough and independent investigation” into reports that Huang was the target of a foreign intelligence effort. CNBC reported the hire on Tuesday, two days after the board said it was opening the review. The board said it had “no reason to believe” that either national security or Nvidia secrets were compromised, but that its inquiry would examine all available information.

Nvidia shares have fallen about 9.5 percent since the reports surfaced, and the company has lost roughly $430 billion in market value over two sessions. On Wednesday morning, the brokerage Baird cut its rating on the stock to neutral from outperform and lowered its price target to $200 from $500, CNBC reported.

Senator says Huang should resign

Sen. Kevin Cramer, a North Dakota Republican and a member of the Senate Banking Committee, told Politico late Tuesday that Huang should step down, citing the risk that the chief executive could be pressured over the relationship.

“The potential for extortion is so tremendous that, with something as sensitive as Nvidia chips, I just think he’s got to go,” Cramer said.

Senate Democratic leader Chuck Schumer said Tuesday that Congress must have a full accounting of the matter and called for new restrictions on U.S. chip exports to China.

House briefing deadline falls Wednesday

Huang also faces a Wednesday deadline from three House Republican chairmen. In a Nov. 4 letter, House Foreign Affairs Chairman Brian Mast, Select Committee on the Chinese Communist Party Chairman John Moolenaar and House Intelligence Committee Chairman Rick Crawford asked Huang to accept a closed-door briefing on Nov. 18 or propose another date by Nov. 11. As of Tuesday afternoon he had not answered, ABC News reported.

Mast said “absolutely” when ABC asked whether he would subpoena Huang if he did not respond. The letter asks about Nvidia’s security protocols and Huang’s interactions with Alice Huang, a Singapore-based Megaspeed executive whom U.S. officials have described as a Chinese intelligence asset. Reports have said the relationship aided at least $7.5 billion in Nvidia chip shipments to China. The allegations have not been established as fact, and China’s foreign ministry has called them groundless.

President Donald Trump has backed Huang, saying Monday that he had spoken with him by phone and that Huang told him he had “absolutely no idea” the woman was a spy. Trump also said the FBI is looking into the matter. Nvidia has said Huang remains chief executive, has apologized to employees for the affair and will cooperate fully with the review. The company reports quarterly results on Nov. 17.

Reporting based on coverage by Reuters, CNBC, ABC News and the South Bay Chronicle.