Nvidia has lost about $1.6 trillion in market value in the row over its chief executive Jensen Huang and a suspected Chinese spy, a sum equal to about one-third of India’s GDP. The Nvidia market value erasure was reported by NDTV on 10 November. Nvidia was the first company to reach a market value of $5 trillion, and it was the world’s most valuable company as recently as October.
The numbers show how fast the fall came. Nvidia’s market value stood at $4.31 trillion at the close of trading on 9 November, down from about $5.88 trillion when its shares hit a 52-week high of $243.37, according to NDTV Profit, cited by IANS. The shares closed at $178.67 on 9 November, a fall of about 26.6 per cent from that peak. The Motley Fool put the loss at about $1.7 trillion since the record close of 6 October, when Nvidia was worth about $5.78 trillion, against about $4.04 trillion by noon on Tuesday. The Nvidia market value erasure has pushed the shares into bear market territory, more than 20 per cent below their high.
Monday brought the sharpest single-day hit. Nvidia shares fell as much as 8.8 per cent in early trading on 9 November before closing down 4.3 per cent, wiping about $192 billion off the company’s value in a day. Shareholders have since filed a proposed class action against Nvidia and Huang, saying they were misled. The Nvidia market value erasure has also drawn in Washington: US President Donald Trump said on Monday that the Federal Bureau of Investigation was looking into Huang’s relationship with the woman at the centre of the row, while saying he had confidence in the Nvidia chief.
Nvidia market value erasure and the board probe
The row began with reports that Huang had been targeted in a foreign intelligence operation. The New York Times reported on 29 October that US intelligence officials suspected Alice Huang, also known as Huang Le, a former executive at Megaspeed, a Singapore data centre firm, of working as a Chinese intelligence asset. The Financial Times reported on 7 November that an internal US intelligence memo alleged Huang had a romantic relationship with her and had been recruited by China’s Ministry of State Security. China has rejected the allegations. On Sunday 8 November, Huang acknowledged an extramarital affair in an email to staff, without naming the woman.
Nvidia’s board said on Sunday that a committee of independent directors, with outside lawyers, would investigate whether Huang was the target of a foreign intelligence effort. The board said it had no reason to believe that national security or Nvidia secrets had been compromised. Huang, 63, co-founded Nvidia in 1993 and has led its rise as the main supplier of chips for the AI boom. Reports say Megaspeed bought nearly $2 billion worth of Nvidia chips, and US authorities are looking into whether chips sold to the firm were diverted to China in breach of export controls on Nvidia’s most advanced AI processors. The Nvidia market value erasure continued into Tuesday trading as investors weighed what the probe could mean.
Nvidia market value erasure and the AI spending question
The probe is one part of the fall. Investors have also grown anxious about whether spending on artificial intelligence can keep rising at its recent pace, and Nvidia sits at the centre of that question. The shares had already fallen from their October peak before the row broke, and the probe gave sellers a fresh reason to exit. The Nvidia market value erasure is now larger than the entire market value of Tesla, the electric car maker, according to IANS.
The next test comes soon. Nvidia reports quarterly results on 17 November, and the numbers will show whether demand for its chips is still growing at the pace investors had priced in. The board probe is still running, and the FBI review adds a second line of inquiry. The Nvidia market value erasure leaves the company worth about $4.3 trillion, still the most valuable listed company in the world, but roughly $1.6 trillion below where it stood at its peak.
What the Nvidia market value erasure leaves behind
For Indian investors, the scale of the Nvidia market value erasure is easy to read: $1.6 trillion is about a third of India’s GDP. The episode has also raised a question the company had long avoided, over who would lead Nvidia if Huang had to step down. The Times of India reported that the affair has forced Nvidia to face that question in public for the first time.