Nvidia shares fall as calls grow for Jensen Huang to resign over chip-diversion probe

Nvidia's shares fell sharply as pressure mounted on chief executive Jensen Huang, including calls for his resignation from Republican Senator Kevin Cramer. The stock closed at $168.89, down nearly 10% over two sessions, a decline that has erased more than $400 billion in market value and left the shares about 30% below their early-October record. Competitors such as AMD rose during the same period, suggesting the drop was specific to Nvidia rather than a broader sector sell-off.

The controversy centers on Megaspeed, a Singapore-based firm that bought billions of dollars in Nvidia chips. A New York Times report in October 2025 raised concerns that the company may have evaded US export restrictions on sales to China. Megaspeed reportedly purchased about $4.8 billion of Nvidia equipment in under two years, and by October 2025 Washington and Singapore were reportedly investigating the company. Nvidia has said an internal review found no evidence of chip diversion. Megaspeed denies wrongdoing, and Beijing has described the spy allegations as a smear.

The focus shifted to personal ties in May 2026, when short-seller Culper Research alleged close links between Megaspeed's head, Alice Huang, and Jensen Huang. Jensen Huang called the company's dealings normal, and Nvidia said the relationship was unremarkable. A later New York Times report said US intelligence believed Alice Huang was a Chinese asset. Reports also cited an unconfirmed figure of $7.5 billion in chips obtained by Chinese buyers through firms linked to Alice Huang. Jensen Huang later admitted to infidelity and referenced concerns raised in the national security press.

The episode has also drawn attention to Nvidia's governance. Reports say the president was briefed on the matter in late 2025, and House committee chairs have sought a closed-door briefing. Semafor reported that no Nvidia director has a national security background. Nvidia's trade compliance committee met three times last fiscal year, and the company has no chief compliance officer.

Legal analysts have pointed to the possibility of shareholder claims in Delaware Chancery Court under the Caremark doctrine, which requires directors to monitor material risks and not ignore red flags. Precedents include the 2019 Blue Bell Creameries case and Boeing's 2021 settlement of $237.5 million. Several structural factors could shape how such claims play out. Jensen Huang has more than 50 direct reports and no named successor. Nvidia has a single class of stock, and Huang owns about 3.5% of the shares and votes that stake. The board is declassified, with directors elected annually.

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Caroline Mercer

World News Correspondent

Caroline Mercer covers public affairs, politics, business, culture and daily news for Core Memo. The role focuses on verification, context, and clear explanations for readers.

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